March 27, 2014 3:40 am JST

Japanese automakers seen paying record dividends in fiscal 2013

TOKYO -- After seeing earnings improve by leaps and bounds in fiscal 2013, Japanese carmakers are on pace to return an unprecedented amount of their profits to shareholders through fatter dividends and stock buybacks.

     The combined value of 10 major Japanese car companies' payouts is expected to surge just over 54% on the year to an all-time high of nearly 930 billion yen ($8.99 billion) in the year ending Monday. The sum represents a 15% increase over the tally for fiscal 2007 -- before the Lehman shock -- when the firms enjoyed record profits.

     As carmakers have also decided to raise workers' wages, some analysts are hopeful the industry may help stimulate domestic consumption.

     Toyota Motor on Wednesday announced it will buy back its own shares for the first time in six years, a move likely to please shareholders by pushing up the stock price. Toyota had halted buybacks in the wake of the 2008 financial crisis.

     The firm will repurchase up to 60 million shares, or 1.89% of those outstanding, for as much as 360 billion yen, making this the biggest buyback by value in 11 years.

     Toyota said it will cancel 30 million shares in June. The company plans to establish in August a foundation to support efforts to address mobility challenges around the world, and will sell treasury stock to that organization for 1 yen per share.

     Seven of the 10 carmakers are slated to increase their dividends. Fuji Heavy Industries, for instance, will raise its annual payout by 25 yen to 40 yen a share. The firm expects a record profit this fiscal year thanks to brisk new-car sales at home and abroad and help from a softer yen.

     Mazda will pay dividends for the first time in four years, while Mitsubishi Motors will make payouts for the first time in 16 years.

     Toyota is expected to enjoy a record consolidated net profit of 1.9 trillion yen for the year ending Monday. While the firm has not yet disclosed a dividend for this fiscal year, it has in the past typically distributed about 30% of net profit to shareholders.

     When the buyback is also taken into account, this means shareholders stand to have roughly half of profit returned to them.