Julius Berger slashes proposed dividend payout to shareholders
The Board of Directors, Julius Berger Plc has reduced proposed dividend payout to the shareholders by more than 27% from ₦2.75 kobo to ₦2.00 as management considered the impact of coronavirus on the economy.
The construction company stated that its Board of Directors deem the move necessary on the back of expected economic situation after the pandemic.
In a statement, Julius Berger recall that it had announced on March 13, 2020 a dividend pay-out of ₦2.75K per 50K share.
The dividend is expected to be paid in addition to a bonus of one new share for every existing five shares held by investors.
According to the firm, the dividend pay-out was based on the strong performance of the construction giant for financial year ended December 31, 2019.
This, it said, was evidenced in the Audited Consolidated Financial Results released to the Market on March 16, 2020.
Supporting the Board decision for a cut, Julius Berger explained that the decision was based on unprecedented and novel COVID-19 global pandemic.
Julius Berger stressed that the ensuing lockdown and social restrictions, which is being experienced globally, Nigeria inclusive, is predicted would have operational effects on businesses and governments, and to lead to a global recession.
“Nigeria is not be immune from the unfolding global issues, especially when one also takes into consideration the additional crisis in the global Oil market and expected declining revenues from Crude Oil Sales.
“2020 will thus be a difficult year for the Country, individuals and businesses, in particular companies in the Construction sector”, the management explained.
It said these trying times for corporates globally, is expected to force a rethink of spending plans by corporate Boards to protect liquidity and ensure long-term sustainability, while balancing the needs for return to shareholders.
“The Board has carefully considered the emerging social, operational, financial and economic impact of the COVID-19 pandemic, the outlook for Nigeria for the financial year 2020 and the impact on the business and cash flows of the Group.
“Acting proactively, the Board decided that it is prudent to withdraw its previously announced intention to recommend the payment of a final cash dividend of ₦2.75K per 50K share”, the Board said.
It concluded that the Board has instead recommend to shareholders at the 50th Annual General Meeting scheduled to hold on June 18, 2020, a final cash dividend pay-out of ₦2.00K per 50k share.
“The savings from paying a cash dividend of ₦2.00, together with the measures taken with respect to operational costs and capital expenditure savings.
“Also, it will ensure that more cash will be retained within the business of the Group.
“The Group’s financial position remains strong as the first quarter results will present, and the Board remains strongly confident of the post COVID 19 future of the business of the Group and its strategic direction to remain a leader in its operating sectors”, the statement reads.
The company said it will continue to closely monitor the ongoing developments in relation to COVID-19, and would continue to take appropriate actions to ensure business continuity and future growth.
Julius Berger slashes proposed dividend payout to shareholders
