The board of construction giant, Julius Berger Nigeria Plc, on Tuesday, said it has revised the earlier announced cash dividend offer downward, given the global and domestic economic outlook arising from the ravaging Coronavirus pandemic that has resulted in a lockdown of the economy just like others across the globe.
In an advisory to the Nigerian Stock Exchange (NSE) announced by Mrs. Cecilia Madueke, its Company Secretary, directors of Julius Berger said such trying time as this requires “a rethink of spending plans by corporate boards to protect liquidity and ensure long-term sustainability while balancing the needs for return to shareholders.”
This, it said, is why in place of the earlier announced N2.75 dividend for the financial year ended December 31, 2019, the board is now recommending N2.00 dividend per share as part of plans to conserve funds.
In addition, the board is offering shareholders a bonus of one new share for every existing five held, in what it said is the outcome of careful consideration of “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.”
According to the statement, “the unprecedented and novel COVID 19 global pandemic, and 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 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.
Acting proactively, the board said it has decided that it is prudent to withdraw the previously announced recommendation to shareholders at the 50th Annual General Meeting scheduled for June 18, 2020,
“The savings from paying a cash dividend of ₦2.00K, together with the measures taken with respect to operational costs and capital expenditure savings, will ensure that more cash will be retained within the business of the group.”
The group assured that its financial position remains strong as will be confirmed by its yet to be released 2020 first-quarter results and that its “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 directors promised to continue monitoring ongoing developments in relation to COVID-19 closely and taking appropriate actions to ensure business continuity and future growth.