EVA Airways Corp’s (EVA, 長榮航空) board of directors yesterday decided not to pay any cash or stock dividends to its shareholders, because global economic uncertainties hurt the aviation sector’s profitability last year.
However, the nation’s second-largest air carrier will use the undistributed earnings to order new aircraft on the back of its positive outlook for the passenger sector, which might boost the company’s long-term profitability, an EVA official said.
The air carrier distributed a NT$1 cash dividend and NT$1 stock dividend per share to its shareholders last year. Before that, the company had not distributed any dividends for four straight years, company statistics showed.
“We believe our shareholders will understand the reason for us not to pay dividends,” EVA spokesperson Nieh Kuo-wei (聶國維) said by telephone. “We have to use these earnings to purchase new planes, helping the -company’s development.”
Last month, EVA president Chang Kuo-wei (張國煒) said the company planned to add six more Boeing 777-300ER aircraft to deal with passenger demand.
However, the carrier’s board yesterday approved the purchase of only three B777-300ER planes, the company said in a filing to the Taiwan Stock Exchange.
As for the other three aircraft to be added to EVA’s fleet, the board did not discuss the issue yesterday, Nieh said, adding that the carrier might use other avenues, such as aircraft chartering, to get the three planes.
For the cargo sector, EVA decided to sell and lease back one of its MD-11 freighters, according to data from the company’s stock exchange filing.
The move indicated EVA might be expecting the sector’s demand to slightly rebound, since the company said last month that it would dispose of all of its six remaining MD series freighters, and delay the purchase of new cargo aircraft to adjust to continuing weak demand.
Meanwhile, EVA’s board has approved a plan to sell up to NT$6.5 billion (US$220.08 million) in five-year corporate bonds to help repay loans and improve financial structure.
The bonds will be issued in denominations of NT$1 million each, with the issuing rate standing at no more than 2 percent annually, the company said.
For the first nine months of last year, EVA reported NT$1.59 billion in net profit, or earnings per share of NT$0.49, company data showed.
A Waterland Securities Co (國票證券) report issued on Monday forecast EVA’s earnings would total NT$1.5 billion, or NT$0.46 per share, for last year, compared with NT$12.02 billion, or earnings per share of NT$3.39, a year earlier.
In other news, Evergreen Marine Corp (長榮海運), the nation’s largest container shipping firm in terms of fleet scale, also decided not to offer any dividends to its shareholders.
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