Large French companies pay 44.3 billion euros to their shareholders

Major companies around the world, particularly in France, continued to pay record high dividends during the second quarter, redistributing the colossal profits of the past year to their shareholders, according to a quarterly study published on Wednesday.

In France, a new record in euros was even broken for a second quarter, with 44.3 billion paid out, according to data collected by asset manager Janus Henderson.

Four French companies in the top 20 of the largest pourers

In the country, “dividends increased by 32.7% in the second quarter”, a rate “higher than the European average” underlines Charles-Henri Herrmann, director of development France and Benelux of Janus Henderson, quoted in the report.

Four French companies are in the top 20 of the largest payers of the quarter, with BNP Paribas (6th), Sanofi (10th), Axa (12th) and LVMH (14th). They had accumulated 35 billion euros in net profits in 2021.

A figure which seems staggering given the current economic situation but which is mainly explained by the economic recovery of 2021, which continues to boost profits, as economist Pascal de Lima explains: “There is a recovery which was quite exceptional with figures in Europe of 6, 7, 8, 9% depending on the different countries Record profits for BNP, LVMH, Axa, Sanofi in particular with reasons that are also linked to the rise in energy prices as early as 2021, before the war in Ukraine and also to the rise in credits.”

“On the next distributions, I think we will not be at these levels at all,” he continues.

The government is against a tax on superprofits

This study was published when the French government, contrary to the choice made by other countries, was unfavorable to a tax on the exceptional profits of large groups, particularly in the energy sector.

On the other hand, converted into dollars, the amount of dividends in France did not reach a record, due to the fall in the European currency against the American currency. All dividends are converted to dollars in the study for comparison purposes.

With $544.8 billion between April and June paid out worldwide in the form of dividends, the 1,200 companies studied by the asset manager distributed on average 11% more money than during the same period l year.

This is a new record for a second quarter, after an already prosperous start to the year. Not counting currency effects or extraordinary payments, the increase even reached 19.1%. Globally, 94% of companies maintained or increased their payments during the second quarter.

Mercedes-Benz and Allianz in the top 10

In the top 10 of the most important redistributors, in addition to BNP-Paribas (6th) already mentioned, we find the Brazilian oil company Petrobras (1st), the Anglo-Australian mining company Rio Tinto (3rd), the German group Mercedes-Benz (5th) but also the German insurer Allianz (8th).

“With most European companies making only one payment per year, the second quarter of 2022 marked for many of them the return to normal dividend payments for the first time since 2019”, recalls the report.

The upwardly revised estimates for 2022

With this momentum, Janus Henderson has again revised upwards the estimates for the year 2022, with dividends which they believe should reach 1.560 billion dollars, an increase of almost 6% compared to 2021. But the increase risks run out of steam in the coming months.

“The rest of the year is unlikely to see such strong growth. Most of the ‘easy’ gains have now been made, with the post-Covid-19 catch-up almost complete,” said the team manager. Global shares of Janus Henderson Ben Lofthouse.