Daimler to resume dividend at twice last rate
Daimler could resume its dividend this year at nearly twice 2008's rate and may bring forward a planned bond issue.
I feel very comfortable with analysts' estimates for an average dividend of 1.15 euros per share, Chief Financial Officer Bodo Uebber told Reuters in an interview.
Investors can expect a good, healthy dividend, he said, reaffirming the luxury carmaker's forecast of an operating profit of 6 billion euros ($8.1 billion) for 2010.
Daimler scrapped its dividend for last year in a surprise move that sent shares tumbling on the day, but promised this was an exception and would not be repeated.
It paid 60 cents for 2008. Uebber said the company's ambition was to exceed its operating profit target by a bit, and dismissed fears about a downturn in the global economy.
From today's perspective judging by the current economic indicators I do not expect a double dip, even if the present conditions in the USA are more difficult than before, he said.
Attempts by the Chinese government to cool down overheating growth would lead to a soft landing for the country's economy, he added.
Should demand prove resilient, this could help Daimler with its borrowing costs.
The prerequisite for a single 'A' rating could be fulfilled starting next year with stable, growing markets, he said.
DEBT ISSUE AHEAD?
Daimler itself expects to be more productive again with the funds it employs, easily generating a higher return this year than those otherwise generally available on capital markets.
At the current consensus of 3.60 euros earnings per share, we should earn far more than our cost of capital, said Uebber.
He said Daimler was amply financed with net liquidity of 9 billion euros but could still tap debt capital markets soon.
A few investors would gladly see another issue from us this year, and conditions would be favorable at the moment. So we are considering whether to bring forward parts of our refinancing planned for 2011 and go to capital markets this year.
Uebber express a relaxed attitude about the euro's exchange rate.
We have seen worse times with the euro, he said. The current exchange rate of (around) $1.27 is not bad. Purchasing power parity is around $1.20 in the long term, so in this regard the dollar has some room on the upside, he said.
Daimler shares pared losses on the news before drifting lower again to trade down 1.2 percent at 41.14 euros by 1417 GMT, making it easily the worst performer on Germany's DAX index of blue chips .GDAXI. The European car sector index .SXAP eased 0.6 percent.
One trader, who declined to be named, said that Daimler's stock price fall could be a sign that investors were profit-taking on the positive CFO comments.
(Writing by Christiaan Hetzner; Additional reporting by Josie Cox; Editing by Michael Shields and David Cowell)