Business
Puma Keeps Dividend Steady Despite Earnings Losses Due to Argentine Peso Depreciation
Puma maintains dividend steady, despite profit decline in the fourth quarter due to the devaluation of the Argentine peso.
Puma Maintains Its Dividend Despite the Depreciation of the Argentine Peso in the Fourth Quarter. The German apparel group announced on Tuesday that it will propose a dividend of 82 euro cents per share ($0.89) for the year 2023 at the Annual General Meeting on May 22 - the same amount as the previous year.
This means that Puma will pay out 40.3% of its annual net income to shareholders, compared with 34.7% in the previous year. According to the company, this increase is due to a strong free cash flow and positive business development. Free cash flow more than doubled last year to EUR 369 million.
"Without the extraordinary devaluation of the Argentine peso, which had a significant one-time accounting effect, our results would have been even stronger," said CEO Arne Freundt. "This reflects the strong performance of Puma." In January, Puma announced that the decision by President Javier Milei's government to devalue the Argentine peso by 54% in December, in an effort to curb the stubbornly high inflation, had particularly led to a plunge in profits.
The net profit in the fourth quarter dropped to 800,000 euros from 1.4 million euros, in line with the preliminary figures Puma released last month. The operating result, a key metric for analysts and investors, increased in the fourth quarter from 40.5 million euros to 94.4 million euros.
Revenues Declined by 9.8% in Reported Figures and by 4% on a Currency-Adjusted Basis to 1.98 Billion from 2.20 Billion Euros. The Company Expects Geopolitical Tensions and Macroeconomic Headwinds to Continue Affecting Consumer Sentiment and Demand, Especially in the First Half of the Year.
"We expect a weaker first half-year. The ongoing negative currency effects will continue to put pressure on profitability in the first half of 2024," said Freundt. Puma anticipates currency-adjusted sales growth in the mid-single-digit range for this year and an EBIT between 620 million and 700 million euros, based on the assumption that the depreciation of the Argentine peso will be fully offset by price increases in the country.
