HeidelbergCement plans to slash its 2008 dividend by 91 per cent as net profit last year dropped and the financial market crisis eats into reserves.
The company proposed a payout of 12 cents (15.6 U.S. cents) a share compared with 1.30 euros a share it paid in the prior year, the Heidelberg-based company said in a statement yesterday.
Net profit for 2008 fell to EUR1.81bn from EUR2.02bn, including one-time charges of EUR400m related to the company’s Hanson Plc acquisition. Sales climbed 30 per cent to EUR14.2bn in 2008, while operating earnings increased to EUR2.15bn from 1.85 billion euros, meeting the company’s own forecasts.
HeidelbergCement last month said it aims to conclude a financial overhaul by midyear and said it is selling businesses and searching for investors. Heidelberg expects sales and operating profit to drop this year, it said in February. The first six months will be difficult, though business may pick up in the second half as the company aims to win orders from government economic programs designed to stimulate economies through increased infrastructure spending.
The suicide of main shareholder Adolf Merckle in January introduced fresh doubt about the company’s future as his family struggles with debt. HeidelbergCement inflated its borrowings in 2007 through the purchase of Hanson for US$11.5bn.