TOKYO -- Japanese cosmetics company Pola Orbis Holdings upgraded its year-end dividend outlook Wednesday, projecting an annual payout effectively 40% above the previous year's, thanks to robust earnings driven by a popular wrinkle-fighting cream.
The company said it plans to pay 45 yen ($0.40) per share at the end of the current fiscal year through December, up from the previous forecast of 30 yen. On top of completed interim payouts, that would bring its total dividends per share to 70 yen for 2017. That amounts to a 40% year-on-year increase, taking into account a four-for-one stock split carried out April 1.
Pola Orbis said it aimed to increase dividends in tandem with profit growth and raised its target payout ratio, the proportion of earnings paid out to shareholders as dividends, to 60% from 50%.
The company initially projected that net profit for 2017 would grow about 15% on the year to 20 billion yen. But cosmetic products have sold briskly, and Pola Orbis now forecasts that net profit will grow 45% to 25.3 billion yen. The projected annual dividend would put the payout ratio at 61%.
In the flagship Pola brand, sales of Wrinkle Shot Serum cream reached 11.2 billion yen in January-September, just over 30% above initial expectations. Selling the cream bundled with other products has yielded strong results.
Tourists visiting Japan are also buying premium cosmetics there, helping boost Pola Orbis's profits.