May 7, 2020 / 5:24 AM / a month ago

HeidelbergCement slashes dividend as coronavirus impact bites

FILE PHOTO: A logo of HeidelbergCement is pictured at their headquarters in Heidelberg, Germany, June 21, 2016. REUTERS/Ralph Orlowski/File Photo

FRANKFURT (Reuters) - HeidelbergCement (HEIG.DE) slashed its dividend proposal as part of a 1 billion euro ($1.1 billion) cost-cutting move aimed at protecting the world’s second-largest cement maker from the impact of the coronavirus pandemic.

An indicator of global economic activity, the group proposed to slash the dividend to 0.60 euros for 2019, down from a 2.20 euro per share proposal made in March, resulting in a cash retainment of 317 million euros.

“In view of the scope and extent of the Corona crisis and the still high level of uncertainty regarding future developments, HeidelbergCement has decided to suspend the progressive dividend policy for the time being,” the group said.

“The aim is to maintain the good financial profile.”

HeidelbergCement, the world’s No.2 cement maker after Switzerland’s LafargeHolcim (LHN.S), said that while it could not yet assess the full impact of the pandemic, it certainly expected it to hit 2020 sales and profits.

First-quarter sales fell 7% to 3.93 billion euros while earnings from current operations before depreciation and amortisation were up 3% at 405 million, helped by lower material costs.

Reporting by Christoph Steitz; Editing by Michelle Martin

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