MUNICH, Germany - BMW, the German maker of luxury cars, said Thursday it would lift the dividend payout to shareholders after earnings rose to new records in 2004 and on hopes for another successful year this year.
BMW said in a statement it planned to pay an increased dividend of 0.62 euros per ordinary share for 2004, compared with 0.58 euros for 2003. And the dividend for preference shareholders would be upped to 0.64 euros per share from 0.60 euros.
The increased dividend was made possible after bottom-line profits sped ahead by 14.1 percent to 2.22 billion euros (2.9 billion dollars) last year, making 2004 the "most successful year" in BMW's history, the car maker said.
The figure was higher than analysts had been expecting.
Operating profit was up by 10.9 percent at 3.55 billion euros on a 6.8-percent rise in sales to 44.335 billion euros.
"We are reaping the benefits of the up-front expenditure previously incurred to launch new products and to expand the international sales organisation," boasted chairman Helmut Panke. "Despite difficult market conditions, we continued to grow profitably."
BMW also said it would ask shareholders at the upcoming annual meeting for permission to buy back up to 10 percent of its share capital.
"The aim of this is to reduce the share capital by withdrawing the shares from circulation," the car maker explained."
The news of th share buy-back drove BMW shares sharply higher on the stock market. Shortly after the announcement, BMW shares were showing gains of 1.19 euros or 3.60 percent at 34.29 euros on the Frankfurt stock exchange.
"BMW's figures look good, but it's the share buyback that's pushing the stock higher," one trader said.
03/10/2005 11:33 GMT