European aviation giant Airbus SE yesterday said that it would cancel its planned dividend payment for last year and also abandon its earnings forecasts for this year because of the economic uncertainty sparked by the COVID-19 pandemic.
“We have withdrawn our 2020 guidance due to the volatility of the situation,” Airbus chief executive officer Guillaume Faury said in a statement.
As part of measures to bolster the group’s liquidity and balance sheet in response to the COVID-19 pandemic, Airbus would also “withdraw the 2019 dividend proposal of 1.80 euros per share with an overall cash value of approximately 1.4 billion euros” (US$1.5 billion), the statement said.
Photo: AFP
“Our first priority is protecting people while supporting efforts globally to curb the spread of the coronavirus,” Faury said. “We are also safeguarding our business to protect the future of Airbus and to ensure we can return to efficient operations once the situation recovers.”
Faury said that he was “convinced that Airbus and the broader aerospace sector would overcome this critical period.”
To ensure Airbus’ financial flexibility, the board of directors had agreed to secure a new credit facility amounting to 15 billion euros in addition to the existing 3 billion-euro revolving credit facility, the statement said.
With these decisions, Airbus would have “significant liquidity available to cope with additional cash requirements related to the coronavirus. Available liquidity now amounts to approximately 30 billion euros,” it said.
Airbus said that the measures were intended to “secure business continuity for itself even in a protracted crisis.”
Airbus is scheduled to hold its annual shareholders meeting in Amsterdam on April 16, but is discouraging physical attendance due to the coronavirus pandemic.
The group had already on Sunday announced that it planned to partially resume production and assembly work at its plants in France and Spain following four days of health and security checks.
France and Spain host some Airbus civil and military assembly lines and manufacture parts needed to preserve Airbus operations in other countries, mainly in the UK and Germany, but also at satellite assembly sites in the US and China.
Last year, Airbus, which employs a global workforce of 135,000, generated revenues of about 70 billion euros.
The firm’s halt for deep cleaning and to space workers on production lines were echoed by similar steps at some suppliers last week, but there are fears that shortages in the supply chain could quickly disrupt output again, industry sources said.
US rival Boeing Co is also leaning toward a temporary stoppage at its twin-aisle jet factories, people familiar with the matter said last week.
Additional reporting by Reuters
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