Delphi says that a dividend may be paid either this year or the next

Article by Christian Andrei, on April 19, 2012

Delphi Automotive plc CFO Kevin Clark said that a dividend may be paid either this year or the next. Last November, the former parts unit of General Motors Co. held an initial public offering of stock. It’s now studying the possibility of paying a dividend by this year at the earliest. Clark was at New York City last Tuesday for an investor presentation.

Delphi, which emerged from bankruptcy in 2009, sold 24 million shares for $22 each in its IPO. Paulson & Co., which his headed by John Paulson Majority, got majority of the proceeds. It was in September 2005 when the former Delphi Corp. suspended its dividend. It filed for bankruptcy in October 2005.

Delphi became profitable once again in 2010 after reducing costs and concentrating on selling fuel-injection systems and other car parts in fast-growing countries like China. A regulatory filing said that the Asia-Pacific region made up $2.46 billion of the company’s $16 billion in sales last year. Delphi said that it anticipates earnings before interest, taxes, depreciation and amortization to be around 15% of sales by 2015, compared with 13.2% in 2011.

And in 2015, its sales amounted to around $22 billion in 2015, Delphi said. Delphi presently has about 119,000 hourly workers, a drop from having 153,000 employees in 2007. Of the figure, about 91% are in countries where labor doesn’t cost as high as the salaries in the U.S.

This aids the company to cut by more than half the average per-hour labor cost to $7 from $15 in 2007. CEO Rodney O’Neal said that Delphi is prepared to spend up to $1 billion on an acquisition.

He said that Delphi may look for companies and technologies to augment its power train, electronics and electrical connectors businesses. He added that a merger isn’t required for the model to work; rather, the company prefers “bolt-on kinds of things.”

Topics: delphi

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