This article first appeared in The Edge Malaysia Weekly on March 24, 2025 - March 30, 2025

THE slew of special dividends announced by Bursa Malaysia companies towards end-2024 has certainly given the impression that listed companies declared and paid out more dividends to their shareholders for the financial year 2024 (FY2024).

The largesse has been attributed to the 2% dividend tax that took effect on Jan 1, 2025. Special dividends had been a key feature in FY2024, especially during the July-to-September quarterly earnings announcements in November.

“We do see a high percentage of Malaysian corporates declaring higher dividend payments by the end of 2024. This was probably triggered by the 2% tax on dividend income exceeding RM100,000 received by individual shareholders, effective from Year of Assessment 2025,” notes TA Investment chief investment officer Choo Swee Kee.

Among the top 100 companies on Bursa Malaysia by market capitalisation, 57 declared higher total dividend per share (DPS) in FY2024 than in FY2023.

At the same time, 20 companies declared lower total DPS over the same period. A total of 16 companies paid the same amount of DPS in both FY2024 and FY2023 while seven did not declare dividends during the last two financial years.

Nestlé (M) Bhd (KL:NESTLE) continued to lead the pack in total DPS declared in FY2024, amounting to RM1.79, or a 100.99% payout ratio. Nestlé’s shareholders would not have been too pleased, however, as the amount declared was actually the lowest in 15 years. Only in FY2009 was it lower, when Nestlé distributed RM1.50 per share.

In the two consecutive financial years prior to FY2024, Nestlé had rewarded its shareholders more handsomely, paying out a total DPS of RM2.68 in FY2023 and RM2.62 in FY2022.

The lower dividends come as the food-and-beverage producer suffered declines in net profit, which slid to RM415.62 million in FY2024 from RM659.87 million a year earlier. Its fourth quarter ended Dec 31, 2024 (4QFY2024) saw a substantial decline in net profit, plunging 72.2% year on year to RM41.1 million — the lowest in 11 years — from RM148.1 million, as input costs increased while sales waned.

Apart from Nestlé, five other companies announced a total DPS of at least RM1 for FY2024. The list includes United Plantations Bhd (KL:UTDPLT) at RM1.71, Heineken Malaysia Bhd (KL:HEIM) at RM1.55, both Petronas Dagangan Bhd (KL:PETDAG) and Hong Leong Industries Bhd (KL:HLIND) at RM1.07, and Carlsberg Brewery Malaysia Bhd (KL:CARLSBG) at RM1.

United Plantations stands out as among the few companies that declare special dividends yearly. In FY2024, it announced two rounds of special dividends, the first being an interim special dividend of 20 sen announced on Nov 13, 2024, and paid out on Dec 10, 2024; the second was a proposed final special dividend of 27 sen that will be paid out after a bonus issue on April 28.

The planter also paid out interim dividends of 40 sen for FY2024 and has proposed a final dividend (post-bonus issue) of 47 sen.

On Feb 10, it had proposed a bonus issue of one share for two existing United Plantations shares, which would enlarge its share capital to 624.4 million. If calculated based on the enlarged share capital, the total DPS for United Plantations in FY2024 is RM1.14 compared to RM1.71 before the bonus issue.

Both Heineken and Carlsberg, known as dividend counters, saw improvement in their net profit for FY2024, which is commensurate with fatter dividend payouts. Carlsberg’s dividend of RM1 was the highest in five years as full-year net profit increased 3% y-o-y to RM337.08 million, from RM327.26 million.

On the other hand, Heineken’s RM1.55 dividend is the highest since its name change in FY2016 from Guinness Anchor Bhd. Notably, Heineken’s net profit hit a record high in FY2024 of RM466.7 million, up 20.6% y-o-y from RM386.8 million.

Hong Leong Industries, whose financial year ended on June 30, 2024, declared record dividends for FY2024, including a special dividend of 50 sen per share paid out last April. This was on top of a first and second interim dividend totalling 57 sen, taking the DPS payout to a record RM1.07 for FY2024, equivalent to a payout of 87%.

The manufacturing arm of Hong Leong group sits on a substantial cash pile, with net cash per share amounting to RM5.69, or about 40% of its RM13.70 share price.

The company, which assembles and distributes the Yamaha brand of motorcycles, saw a 33.5% increase in its FY2024 net profit to RM387.89 million, thanks to improved sales and profit margins, while a one-off insurance compensation of RM25 million and disposal gain of RM18.7 million from the fibre cement board business also boosted profit.

Fund managers observe that it made sense for companies with significant dividend reserves to reward shareholders before the additional 2% dividend tax kicked in.

Kossan Rubber Industries Bhd (KL:KOSSAN), which also has a substantial cash pile where its 62 sen net cash per share is about 33% of its share price, surprised the market last November by declaring a special dividend of six sen per share for FY2024, despite a decline in its third quarter ended Sept 30, 2024, net profit of 28.15% y-o-y to RM29.44 million.

Having said that, Kossan’s full-year net profit surged to RM120.03 million versus RM13.34 million in FY2023 as revenue rose 19.85% y-o-y to RM1.91 billion, from RM1.59 billion. For FY2024, the company declared dividends amounting to eight sen per share, double that of the previous year.

Kossan’s major shareholder is group managing director and CEO Tan Seri Datuk Lim Kuang Sia via Kossan Holdings (M) Sdn Bhd’s 35% stake. Directly, Lim holds 2.75% interest.

Then, there were the companies that brought forward their dividend payments before the dividend tax kicked in.

One such company is Chin Teck Plantations Bhd (KL:CHINTEK), which declared a special dividend of seven sen per share plus a first interim dividend of eight sen per share for FY2025 ending Aug 31, 2025.

The dividends were paid on Dec 27, 2024, and, interestingly, when the announcement was made on Nov 28, it was before the conclusion of the company’s first financial quarter ended Nov 30.

Chin Teck has so far paid total dividends of 15 sen per share for FY2025. For FY2024, it declared dividends amounting to 40 sen per share, doubling the FY2023 payout.

Another company that appears to have rushed its payment is Rhone Ma Holdings Bhd (KL:RHONEMA), which usually declares its final dividend in April. It made an interim dividend announcement of one sen per share on Nov 18, which was paid out on Dec 27, 2024.  It did not declare any final dividend in conjunction with its 4QFY2024 earnings announcement. For FY2024, Rhone Ma’s total dividend amounted to 1.5 sen per share.

Investors were pleasantly surprised during the recent October-to-December quarterly earnings announcement as several companies continued to declare special dividends.

Petronas Dagangan, whose net cash per share amounted to RM2.02, announced a special dividend in FY2024 of 20 sen per share during the presentation of its final quarter earnings for FY2024, which took place in February.

With the inclusion of its special dividend alongside the other interim dividends announced in the financial year, the DPS of RM1.07 marks the highest payout since FY2014, when the company declared a DPS of RM1.13.

The petrol retailer, whose largest shareholder is Petroliam Nasional Bhd (Petronas) with a 63.94% stake, saw an improvement in its FY2024 net profit, up 15.22% y-o-y to RM1.09 billion. Revenue rose marginally to RM37.95 billion, from RM37.55 billion a year ago.

Kenanga Research notes in its 4QCY2024 earnings round-up report on March 4 that companies continued to declare special dividends in February.

“Such balance sheet management is viewed positively, given an active stance in rewarding shareholders. The telco sector saw such moves this quarter [by companies such as] TIME dotCom Bhd (KL:TIME), which declared special divi­dends, [and] Maxis Bhd (KL:MAXIS),” says the research house.

TIME dotCom declared a special dividend of 27.45 sen per share in February, the second one for FY2024, bringing the total payout for the year to 56.8 sen, which is equivalent to a 274% payout ratio.

Maxis also declared a one-time dividend of one sen per share during the recent 4Q result announcements, which brought the company’s total payout for the year to 17 sen per share.

Other companies (on the top 100 market capitalisation list) that also declared special dividends during the recent quarterly earnings announcement include KPJ Healthcare Bhd (KL:KPJ), Guan Chong Bhd (KL:GCB), Genting Plantations Bhd (KL:GENP), Sime Darby Bhd (KL:SIME) and Telekom Malaysia Bhd (KL:TM), to name a few.

Interestingly, several companies either declared higher dividends or maintained their payout from the previous year, despite expe­riencing a decline in net profit.

MISC Bhd (KL:MISC) and Petronas Chemicals Group Bhd (KL:PCHEM) (PetChem) — subsidiaries of Petronas — were two such companies. The national oil company holds a 51% stake in MISC and 64.35% interest in PetChem.

MISC sank into a loss in 4QFY2024, the first time in more than two years, as a surge in provisions for a writedown in assets and lower revenue dragged it to a loss position of RM446.2 million. For the full year, its net profit declined 44% to RM1.19 billion and its revenue slipped 7.3% to RM13.24 billion.

Despite the weaker earnings, the shipping company kept its dividend payout for the year unchanged from FY2023, totalling 36 sen per share, equivalent to a 135% payout ratio for FY2024.

PetChem, which suffered its first quarterly loss in 3QFY2024 on foreign-exchange losses, saw full-year total net profit of RM1.18 billion, down 30.7% from RM1.7 billion in FY2023. It also maintained its total payout for the year at 13 sen per share, equivalent to a payout ratio of 87%.

CelcomDigi Bhd (KL:CDB) declared a total DPS of 14.3 sen in FY2024, up from the 13.2 sen paid in FY2023, despite the decline in net profit to RM1.38 billion, down 11.3% y-o-y from RM1.55 billion.

Given the slew of special dividends announced in FY2024, some believe the payout in FY2025 could be reduced, as companies may want to conserve cash amid uncertainties in the external environment.

The head of a research house observes: “There is a lot of uncertainty surrounding trade tensions and the market itself has been volatile. So, some companies might choose to conserve their cash in 2025. How much dividend they pay out would still depend largely, however, on their dividend policies and their earnings this year. Nevertheless, many companies pay dividends that are higher than what is stated in their policies.”

Kenanga Research has highlighted several companies it believes could continue to distribute generous dividends in the months ahead.

“We like LPI Capital Bhd (KL:LPI), for which we have estimated the special dividend yield could be in the mid-teens after it disposes of a stake in its parent company … We note that Public Bank Bhd (KL:PBBANK) has indicated that it would like to target a higher payout ratio of 60% in 2025,” it says, adding that AMMB Holdings Bhd (KL:AMBANK) is also a candidate for an increase in dividend payout potential “assumed at 50%”. 

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