MILAN (Reuters) - Global dividends fell 0.9% to $421.9 billion in the third quarter due to lower special dividends and a small number of corporations making large cuts to investor remuneration, a report showed on Wednesday.
The figures by fund manager Janus Henderson reflect steep cuts across the mining sector, as well as large reductions from oil producers in Brazil and Taiwan, which were only partly offset by higher payouts from the banking and utilities sectors.
Janus said total dividends were slightly better than expected in the quarter despite lower one-off special payouts and exchange rate effects. These factors led to a slight cut to its 2023 dividend forecast to $1.63 trillion from a previous estimate of $1.64 trillion, which is still a record number, up 4.4% from 2022.
"Dividend growth from companies generally remains strong across a wide range of sectors and regions, with the exception of commodity related sectors like mining and chemicals," said Ben Lofthouse, head of global equity income, at Janus Henderson.
"Special dividends have decreased, reflecting less M&A activity and the disappearance of windfall profits in sectors like mining," he added.
The largest cuts to payouts were made by Brazilian oil group Petrobras and Australian miner BHP. More than half of mining companies reduced their payouts while 89% of companies overall raised their dividends or held them during the period, the report said.
Banks distributed an extra $5.8 billion, or 9.3% more, on an underlying basis from a year earlier, Janus Henderson said, while a big increase from Czech electricity producer Cez also made an impact on the utilities sector.
Chemicals and real estate were notably weaker due to economic conditions in Asia, it said.
During the quarter, China Construction Bank Corp was the biggest payer for the second straight quarter, followed PetroChina and China Mobile, which helped push Chinese dividends towards a record year.
U.S. dividend growth slowed for the eighth consecutive quarter in Q3, dipping to 4.5%.
Europe continued to show very strong growth.