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Lockmaker Assa Abloy boosts dividend, but wary on outlook
Global Banking & Finance Review®
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STOCKHOLM (Reuters) -Assa Abloy, the world’s biggest lockmaker, raised its dividend more than expected as it met quarterly profit forecasts on Friday, signalling its confidence even as it braces for an uncertain economic outlook.
STOCKHOLM (Reuters) -Assa Abloy, the world’s biggest lockmaker, raised its dividend more than expected as it met quarterly profit forecasts on Friday, signalling its confidence even as it braces for an uncertain economic outlook.
The Swedish group reported a 28% increase in fourth-quarter operating profit to 5.15 billion Swedish crowns ($49.62 billion) from 4.01 billion a year-earlier. Analysts polled by Refinitiv had on average expected a profit of 5.16 billion crowns.
The company, whose products range from security doors and automated entrance solutions to electronic and mechanical locks, proposed a dividend of 4.80 crowns per share for 2022, up from 4.20 crowns a year earlier and above the 4.66 crowns seen by analysts.
Assa has in recent quarters cut costs as slowing demand, supply chain problems and semiconductor shortages have continued to hamper its business.
In the fourth quarter, a recovery in activity among travel-related customers and continued very strong demand in the U.S. non-residential market helped boost sales.
However, Chief Executive Nico Delvaux warned of continued uncertainty after a year of supply chain challenges, high inflation and COVID-19-related disruptions.
“Since the macroeconomic environment continues to be uncertain, we have prepared ourselves to mitigate any possible negative changes in the demand and to reduce our cost-base throughout the organization,” he said in a statement.
Assa, whose rivals include Allegion and Stanley Black & Decker, said organic, or like-for-like, sales rose 9% in the quarter as sales increased to 32.92 billion crowns.
(Reporting by Marie Mannes Editing by Terje Solsvik and Mark Potter)
A dividend is a portion of a company's earnings distributed to shareholders, typically in cash or additional shares. It represents a way for companies to share profits with investors.
Operating profit is the profit a company makes from its core business operations, excluding deductions of interest and taxes. It reflects the efficiency of a company's operations.
Supply chain challenges refer to disruptions or inefficiencies in the production and distribution processes that can affect a company's ability to deliver products or services.
Economic uncertainty refers to a situation where there is a lack of predictability in economic conditions, which can affect business decisions and consumer confidence.
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