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Hon Hai proposes highest ever annual cash dividend per share
Taipei, May 12 (CNA) Hon Hai Precision Industry Co., the world's largest contract electronics maker, has proposed to issue an annual cash dividend per share that will be the biggest in its history.
At a board meeting Thursday, Hon Hai proposed a cash dividend of NT$4.5 (US$0.15) per share to shareholders, compared with NT$5 issued for 2015 which comprised NT$4 in cash and NT$1 in stock.
Based on its 2016 earnings per share of NT$8.6, the proposed cash dividend payout ratio will be 52.3 percent, also the highest in the company's history. The dividend yield will be 4.3 percent based on Hon Hai's closing price of NT$104 on the Taiwan Stock Exchange Thursday.
The dividend will be paid pending approval by Hon Hai's shareholders at an annual general meeting on June 22.
If the proposal is approved, Hon Hai is expected to issue about NT$77.98 billion in cash dividends for 2016, its highest ever.
Hon Hai Chairman Terry Gou, who holds 1.621 billion shares in the company, is expected to receive about NT$7.3 billion in cash dividends.
At the board meeting next month, the company, which assembles iPhones and iPads for Apple Inc., will also decide on a proposal to pay a total NT$10.497 billion in bonuses to its 7,510 employees in Taiwan.
Meanwhile, Hon Hai reported NT$28.17 billion in net profit for the first quarter of the year, down by a quarterly 59.04 percent but up 2.14 percent from a year earlier.
Due to the slow season in the January-March period, Hon Hai's gross margin for the quarter fell 1.09 percentage points from the previous quarter to 7.36 percent.
However, its first-quarter gross margin increased 0.3 percentage points from a year earlier on its product diversification.
The company reported NT$50 million in first-quarter non-operating losses but did not release any data on non-operating losses. Market analysts said Hon Hai's non-operating losses were most likely foreign exchange losses due to the Taiwan dollar's appreciation of about 6 percent against the U.S. dollar.
For the January-March period, Hon Hai reported an EPS of NT$1.63, down from the fourth quarter's NT$3.98, but up from NT$1.6 in the same period last year.
Looking ahead, analysts said Hon Hai's second-quarter sales are likely to drop by double digits due to the slow season but the company is expected to gain momentum in the third quarter, when Apple is due to unveil its next generation iPhones.
Hon Hai reportedly is the sole assembler of iPhones with an advanced 5.8-inch organic light-emitting diode (OLED) touch screen.
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