Grieg puts dividend on ice because of Covid-19
Salmon farmer Grieg Seafood looks set to delay its 2019 dividend to shareholders because of the uncertainty caused by the Covid-19 epidemic.
The Norwegian company held a board meeting today at which board members resolved to request authorisation at its annual general meeting to pay dividend later in the year.
“The Board propose a stable and good dividend policy, however, the Board will consider the financial situation and follow the framework provided for pursuant to the provisions of the Public Limited Companies Act,” the company said in a statement.
NOK 645m net profit
Grieg’s board approved its Integrated Annual Report, which it said contained no significant changes from the preliminary report published in Q4 2019. The report can be found here.
The company’s pre-tax profit was NOK 841 million (£66.2m) and post-tax profit was NOK 645m. It harvested 82,973 gutted weight tonnes last year, up from 74,623 gwt in 2018, and is targeting 100,000 gwt this year.
In his introduction to the annual report, chief executive Andreas Kvame said: “Nobody knows what lies ahead or how long the impact of Covid-19 will last.
“After many profitable years, Grieg Seafood is in a robust financial condition. Still, we are preparing for all kinds of scenarios. We are postponing some investments to increase our buffer further, and we are making sure that our debt ratio is reasonable.
Huge opportunities
“In the long-run, though, with a growing middle class and consumer trends focusing on health and sustainability, we see huge opportunities for our fish in the market.
“We will do everything we can to ensure that we get through this crisis and continue to create value for our shareholders, customers, employees, and local communities alike for a long time to come.”
Grieg farms salmon in the Rogaland and Finnmark regions of Norway, in Shetland and in British Columbia, western Canada. It has also bought Grieg Newfoundland in eastern Canada, which has the potential to produce between 30,000 and 45,000 gwt annually.
The company’s decision to delay its dividend because of the uncertainty caused by the Covid-19 epidemic is the same as that made by Faroese salmon farmer Bakkafrost almost a fortnight ago. It chose to delay the £60m pay-out in order to “maintain the agility and financial strength” to be able to continue planned investments in its capital expenditure programme.
The epidemic has also prompted SalMar to scrap its planned £187m dividend and Norway Royal Salmon to halve its proposed dividend from NOK 10 to NOK 5 per share.
