The 2020 dividend season risks being severely compromised due to the coronavirus emergency. It is yet another bad news for investors who, after the recent (and substantial) losses, hoped to recover something thanks to the coupons.
By the hour the number of listed companies that decide to increases suspend or cancel the coupon in order to set aside more liquidity needed to face the economic and financial difficulties that the pandemic is causing and will continue to cause all over the world. It is not known how long it will last or even how hard the blow will be, so it is better to prepare to contain the impact by supporting coffers and assets. This is the approach that various groups, at an international level, are deciding to adopt in the face of the Covid-19 emergency.
BREMBO AND AMPLIFON 2020 DIVIDENDS JUMP
As far as Piazza Affari is concerned, there are three companies that have decided to stall for the moment: Brembo, Amplifon and Cattolica.
Starting from the first, last 9 March Brembo had released the 2019 accounts, announcing in parallel that the board of directors would propose to the shareholders' meeting the distribution of a dividend of 22 cents per share. The detachment date had been set for May 18, 2020, the payment date 2 days later. However, the spread of the emergency has forced the Bergamo company to take a step back.
Brembo has announced that it has suspended the payment of the 2020 dividend due to the possible economic fallout of the Coronavirus. The BoD "has taken note of the significant change in the global economic scenario following the spread of the Covid-19 virus pandemic" and "adopting a prudential approach, in order to support the capital solidity of the group and contain the future economic-financial impacts, the board therefore decided to suspend the resolution to distribute dividends on 2019 earnings already approved". This is what we read in the note from the Bergamo-based company which, however, leaves a crack open: the dividend on 2019 profits will eventually be proposed when the current situation linked to Covid-19 will be overcome.
The stop to the dividend is having consequences on the share price, which in the mid-morning on the Mid Cap dropped 9% to 8,01 euros. Same fate for Amplifon (-4,41% to 17,76 euros). On Friday 20 March, the company announced that "in consideration of the intensification of the health emergency and the socio-economic effects linked to the spread of Covid-19", reads the note, "Amplifon has deemed it appropriate, prudentially and in order to strengthen further the financial structure of the company by limiting financial outlays, approve a proposal for the allocation of the profit for the year 2019". In detail the board of directors will propose to the shareholders' meeting to allocate the entire profit to the retained earnings reserve. Translated, there will be no dividend for the 2020 season.
It takes time too Cattolica Assicurazioni which has chosen to postpone any decision on the 2020 dividend due to "the extreme volatility of the financial markets following the spread of the pandemic" in order to have "a more outlined framework in which to assume the same".
DIVIDENDS 2020: STOP ALSO FROM THE INTERNATIONAL GIANTS
After years of internal warfare Airbus and Boing agree on something: the end of 2020 dividends. The European giant of the skies has canceled the payment of dividends to its shareholders for the year 2019, but also its forecasts on the results for 2020. Through a note Airbus has in fact made it known that it has "received the approval" of its board to “withdraw the proposed 2019 dividend of €1,80 per share, which represents a total value of approximately €1,4 billion”. For its part, Boeing, which has long been in severe difficulty due to problems related to the 737 Max, has announced that it has suspended coupon payments and intends to cancel all share buyback programs until further notice.
In this context we must consider the profound crisis of the entire global aviation sector. The coronavirus is bringing airlines to their knees and, according to the Center for Aviation (Capa), by the end of May, many companies will already be bankrupt. A few days ago, IATA spoke of revenue losses of 113 billion dollars, a figure that now seems destined to rise sharply.
Turning to the automotive sector, the first company in the sector to suspend its dividend is Ford. On February 4, the US company had decided to "reward" its shareholders with a total coupon of 2,5 billion euros. At the basis of the decision is the stop to production established due to the coronavirus.
