Lockmaker Assa Abloy boosts dividend, but wary on outlook

Lockmaker Assa Abloy boosts dividend, but wary on outlook
© Reuters. An Assa Abloy lock is displayed in the shop in Riga, Latvia September 19, 2013. REUTERS/Ints Kalnins

STOCKHOLM (Reuters) -Assa Abloy, the world’s biggest lockmaker, raised its dividend more than expected as it met quarterly profit forecasts on Friday, signalling its confidence even as it braces for an uncertain economic outlook.

The Swedish group reported a 28% increase in fourth-quarter operating profit to 5.15 billion Swedish crowns ($49.62 billion) from 4.01 billion a year-earlier. Analysts polled by Refinitiv had on average expected a profit of 5.16 billion crowns.

The company, whose products range from security doors and automated entrance solutions to electronic and mechanical locks, proposed a dividend of 4.80 crowns per share for 2022, up from 4.20 crowns a year earlier and above the 4.66 crowns seen by analysts.

Assa has in recent quarters cut costs as slowing demand, supply chain problems and semiconductor shortages have continued to hamper its business.

In the fourth quarter, a recovery in activity among travel-related customers and continued very strong demand in the U.S. non-residential market helped boost sales.

However, Chief Executive Nico Delvaux warned of continued uncertainty after a year of supply chain challenges, high inflation and COVID-19-related disruptions.

“Since the macroeconomic environment continues to be uncertain, we have prepared ourselves to mitigate any possible negative changes in the demand and to reduce our cost-base throughout the organization,” he said in a statement.

Assa, whose rivals include Allegion (NYSE:ALLE) and Stanley Black & Decker (NYSE:SWK), said organic, or like-for-like, sales rose 9% in the quarter as sales increased to 32.92 billion crowns.