February 24, 2017 / 5:04 AM / a year ago

UPDATE 1-Sika posts 21.8 pct rise in 2016 profit, to propose higher dividend

(Adds details, background)

Feb 24 (Reuters) - Speciality chemicals maker Sika on Friday posted a 21.8 percent rise in net profit for 2016 and said it will propose an increased dividend for 2016.

Zurich-based Sika said net profit rose to 566.6 million Swiss francs ($563.22 million), beating a forecast of 558 million francs in a Reuters poll.

Sika, which makes chemicals used in the construction and automotive industries, has been embroiled in a takeover battle with construction materials company Saint-Gobain for more than two years.

Saint-Gobain has been trying to take control by buying the controlling stake of Sika’s founding family - an attempt that has been resisted by Sika’s management and many of its other shareholders.

Sika won an important round in the court battle in October, but the founding family has appealed to a higher court in the Swiss canton of Zug, with a decision expected later this year.

Sika said it aimed to increase sales by 6 percent to 8 percent in 2017 and achieve overall revenue of 6 billion francs for the first time.

At the annual general meeting, the board of directors will propose a 31 percent increase in dividend for 2016 to 102 francs per bearer share and 17.00 francs per registered share, Sika said.

The company, which aims to boost profit at a higher rate than sales, said it plans to open eight new factories and set up three national subsidiaries in 2017. ($1 = 1.0060 Swiss francs) (Reporting by John Revill in Zurich and Vishal Sridhar in Bengaluru; Editing by Sunil Nair)

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