Brazilian companies distributed record dividends in 2021, led by Vale, the eighth largest payer in the world, after surfing the surge in iron ore prices, according to a report by manager Janus Henderson Investors.
Companies across the country distributed a total of $25.4 billion in dividends in 2021, up from $9.4 billion a year earlier. The value was the third highest among emerging countries, behind China and Russia. Brazil accounted for more than half of growth in developing markets, which totaled US$164.4 billion in 2021, also a record.
Of the total distributed in Brazil, almost half, or 12.4 billion dollars, came from Vale. The number was the second highest amount paid by a mining company worldwide, having been beaten only by BHP, highlights the report.
The survey is conducted on a quarterly and annual basis and tracks the dividends of the 1,200 largest companies in terms of market value in the world. Dividends are recorded in US dollars, which also has an exchange rate effect, and are included based on the payment date.
Vale’s presence in the ‘top 10’ of largest payers follows a trend seen around the world, as mining companies, along with banks, were the biggest drivers of growth in the record amount of global dividends distributed in 2021.
Vale announced the resumption of its dividend policy in July 2020, after interruption for about a year and a half, following the collapse of the mining company’s dam in Brumadinho (MG), in 2019, which killed more than 250 people.
But the scenario for 2022 in the sector is uncertain. “Iron ore prices are an important factor, and while they have recovered from a devaluation, they are at a lower point than they were for most of 2021,” the report says.
The survey also highlights Petrobras as a major driver of dividend growth in the country in 2021, with US$7.7 billion distributed.
Among the banks, Banco do Brasil, with 1.19 billion dollars distributed, and Bradesco, with 1.15 billion dollars, pulled the line.
The only sector in the country to report lower dividends was beverage, given the cut made by Ambev, from 1.2 billion dollars in 2020 to 223 million dollars in 2021.
Regarding the potential impacts of the war in Ukraine on dividends, Ignacio de la Maza, who heads the Latin America area at Janus Henderson, said that this will “vary according to the sector and the company, with some being more impacted than others by sanctions and higher input prices”.
Global dividends reached a record US$1.47 trillion in 2021, a nominal increase of 16.8% compared to 2020. When adjusted for extraordinary dividends, currency variations, temporal effects and index changes, the increase was 14.7%. .
More than a quarter of the current increase came from mining companies, because of the sharp rise in commodity prices. BHP became the highest-dividend company in the world, with Rio Tinto in third place and Fortescue in 10th.
The resumption of the distribution of benefits by companies that had interrupted their policies in 2020 due to the pandemic helped to boost the numbers, as in the case of banks.
Janus Henderson projects $1.52 trillion in global dividends in 2022, which would be a new record, helped by expected growth in oil company numbers.