MOSCOW (Reuters) - Shareholders of Russia’s largest steel producer NLMK on Friday decided not to approve a fourth-quarter dividend previously recommended by the board, proposing to halve the payout, the company said in a statement.
The company, which said it may consider topping up dividend payments in the second half of the year, is also making changes to its 2020 investment programme and plans to announce an updated capital expenditure forecast, as the new coronavirus affects key markets.
The board, re-elected during the meeting, recommended a new fourth-quarter dividend of 3.12 roubles ($0.0419) per share, thereby directing $250 million towards dividends, based on the current exchange rate.
The company had previously recommended directing $500 million towards dividends, to be paid at 5.16 roubles per share.
Shareholders will consider the recommendation at an extraordinary general meeting scheduled for May 29.
The company said in a statement that it supported the shareholders’ decision as the previous fourth quarter dividend recommendation had been made “in different market conditions”.
“Currently it is correct to adjust capital allocation to ensure absolute financial stability in all scenarios,” NLMK said in a statement.
The company said it does not plan to make any changes to its dividend policy and will aim to pay out 100% of its free cash flow.
“If the macroeconomic situation returns to normal quickly, the company does not rule out raising dividend payments to a higher level based on third and fourth quarter results,” a company spokeswoman said.
“The company is also optimising its 2020 investment programme,” the spokeswoman said.
NLMK previously retracted its capital expenditure forecast for the current year, previously set at $1.1-$1.2 billion, due to the spread of the new coronavirus. It will present a new forecast on April 30.
Reporting by Anastasia Lyrchikova; writing by Polina Ivanova; editing by Louise Heavens