The board of directors at Lerøy Seafood Group ASA is anticipating that the Bergen, Norway-based fish farming and fishing company’s earnings will be lower this year than previously expected due to the impact of the COVID-19 crisis. It is also proposing a much lower dividend payment for 2019.
A statement from the board, issued after a meeting on 23 April to approve financial statements for 2019, emphasized that “uncertainty relating to assessment of future development is much greater than normal, as it is extremely difficult to estimate the extent and scope of the consequences of the ongoing corona pandemic.”
It said that based on the new risk incurred due to the pandemic, its expectation for the group’s earnings in the current year differ from what was communicated in conjunction with the preliminary financial figures published on 25 February, 2020.
“The board of directors retains its guiding for projected earnings for Q1 2020. However, due to the increase in uncertainty, the board currently expects group earnings for 2020 in total may be lower than those achieved in 2019,” it said.
In February, the board stated that it was expecting earnings in the first quarter of 2020 to be “substantially higher” than those achieved by the group in Q1 2019. It had also proposed a dividend of NOK 2.30 (USD 0.22, EUR 0.20) per share to be distributed in 2020.
Two months later, the board acknowledged the spread of the coronavirus pandemic “has reduced predictability in the global economy,” and subsequently adjusted its proposal for allocation of the annual profit figure for 2019. It is now proposing that shareholders at the annual general meeting scheduled for 27 May, 2020, adopt a dividend payment of NOK 1.50 (USD 0.14, EUR 0.13) per share.
Authorization to pay up to NOK 0.80 (USD 0.07, EUR 0.06) per share as dividend before the end of the present year has also been requested by the board. The dividend payment for the financial year 2018 was NOK 2.00 (USD 0.19, EUR 0.17) per share.
“The shareholders shall feel confident that the board of directors’ management of profit allocation is appropriate at all times and during this current and other periods of uncertainty. After careful consideration, the board of directors has weighed up the shareholders’ need for predictability, reallocation of capital and the need to take into account the increased level of risk currently dominating the global economy,” the statement said.
Lerøy’s parent company, Austevoll Seafood ASA, has made a similar proposal to its shareholders, revising down its proposed dividend of NOK 4.50 (USD 0.42, EUR 0.39) to NOK 2.50 (USD 0.23, EUR 0.22) per share. It will also request shareholders participating in its annual meeting, taking place on 28 May, agree to pay up to NOK 2.00 per share in dividends before the end of the present year.
“Due to the spread of the global pandemic COVID-19, the global economy is impacted by increased uncertainty and substantially reduced predictability. On this basis, the board of directors has adjusted its reported proposal for allocation of the profit figure for 2019,” Austevoll said.
Photo courtesy of Lerøy Seafood Group
