Bakkafrost pulls back €66m cash dividend

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Increased risk after coronavirus outbreak.

“Due to the uncertainty caused by the ongoing COVID-19 pandemic the board of directors of Bakkafrost have today decided to pull back the dividend payment proposition for 2019 and delay the proposition on dividend payment for 2019 until Bakkafrost’s H1 presentation on 25 August 2020, at which time the board of directors expect the level of uncertainty to have reduced,” Bakkafrost announces Thursday night.

“Over the past several weeks the COVID-19 pandemic has spread across the globe and greatly affected the salmon market, disrupted downstream supply channels and logistics. This situation evolves continuously and creates significant uncertainty which will most likely prevail for some time yet. The level of uncertainty has convinced the board of directors and the management of Bakkafrost that it is most responsible to shareholders, employees and the society to postpone the decision regarding the dividend payment for 2019.”

“It is important to ensure that Bakkafrost maintains the agility and financial strength to be able to continue the many planned investments in the capex program. These investments enable our ambition for future growth as well as being important for the recovery of the economy in the Faroe Islands and Scotland on the other side of the pandemic crisis,” the company added.

“It is important to stress that Bakkafrost has a very strong balance sheet and good access to capital. In December 2019 Bakkafrost refinanced the group’s bank facilities by ensuring 5-year bank facilities with banking group consisting of Nordea, DnB and Rabobank. The new bank facilities amount to €352m plus £100m and Bakkafrost has an additional accordion option for €150m.”

By the end of Q4 2019 Bakkafrost’s net interest-bearing debt was DKK 1,019m and the undrawn credit facilities were DKK 2,470m. The equity ratio was 65% by the end of year.

“Today’s resolution to postpone the proposition on dividend payment for 2019 does not alter Bakkafrost’s dividend policy which is that 30-50% of earnings per share shall be paid out as dividends,” Bakkafrosts states.