Auckland Airport Cancels Interim Dividend For FY20
Auckland Airport has announced the cancellation of its interim dividend payment following recent developments in the outbreak of COVID-19.
Chief Executive Adrian Littlewood said Auckland Airport had made the difficult decision following further information from airlines about the expected number of flight cancellations. This included an announcement from Air New Zealand that it plans to reduce its international and domestic capacity in the coming months.
“This decision has not been taken lightly, but our businesses are very closely linked, and when airlines reduce flying and fewer people travel, our revenues fall too. As this happens, we will act fast as an organisation to reduce spending and cut costs.
“As a result, we have decided that continuing with this year’s interim dividend payment (11c per share) on 3 April would not be in the best interests of the company. We realise some of our shareholders may be disappointed, but we ask for their understanding amid these extremely challenging circumstances,” said Mr Littlewood.
A wide range of cost cutting measures have been introduced at Auckland Airport this week, including a hiring freeze, a suspension on all discretionary spending and a review of work underway with external consultants. In addition, Management is reviewing its capital expenditure programme and the Board has decided to reduce directors’ fees by 20%, while Mr Littlewood has volunteered to cut his salary by 20%. These changes will remain in place for the rest of the financial year.
“This continues to be a dynamic situation, and our focus remains on maintaining the airport operation and supporting the Ministry of Health and border agencies in protecting New Zealand against the spread of COVID-19,” said Mr Littlewood.
Auckland Airport yesterday announced it had suspended earnings guidance for the year to 30 June 2020. Further market updates will be issued as significant new information emerges.