Italian Marine Cable Laying Firm to Cut Dividend
Italian marine cable installation company Prysmian plans to cut the dividend by 50 percent, citing the effect of the coronavirus pandemic and its effects on the global economy.
Citing the spread of the pandemic and its potential duration, and given the uncertainty surrounding the terms and geographical extent of the restrictions to production and logistics around the world, as well as the slowdown that it could cause on the demand and the economic cycle, Prysmian said it would propose the dividend to be reduced at the next shareholders' meeting.
The company, providing cable installation services for the offshore energy industry, said: "...the Board of Directors deems it prudent to modify the proposed allocation of 2019 profits to be submitted in the forthcoming Shareholders’ Meeting called for 28 April 2020, reducing the dividend to €0.25 per share from the originally proposed €0.50 per share. Once approved in the Shareholders’ Meeting, the dividend will be paid out from 20 May 2020, with record date 19 May 2020 and ex-dividend date 18 May 2020."
The Board of Directors said it reserved the right to call an interim Shareholders’ Meeting, in the course of the year, to propose the possible distribution of the remaining 50% (€0.25 per share) of the originally planned amount...should the uncertainty related to the development of the pandemic and its effects on the economic cycle and business appear clearer, thus increasing visibility regarding the group’s financial performance.
The company will, under the revised terms, distribute approximately €66 million as dividends, while allocating the remainder of the 2019 profit of the parent company, Prysmian S.p.A., to reserves.
"The Group can count on a broad geographic distribution of its production sites and an extensive diversification of its end markets. Top priority has been given to protecting the health of employees by implementing strict health and safety measures for plants and offices and making extensive use of remote working. Given this situation, the Group’s management has made it a priority to ensure the greatest possible continuity of its supply chain and operations, to protect its business and its ability to generate cash-flows, and to adopt all possible cost containment and cash-flow protection measures," Prysmian said.