The Management and Supervisory Board proposed to distribute the net profit from 2019, in the total amount of HRK 23.34m to the retained earnings and mandatory reserves.
Tankerska Next Generation pubished a convocation to the GSM in which the Management and Supervisory Board proposed to distribute the net profit from 2019, in the total amount of HRK 23.34m to the retained earnings and mandatory reserves. This implies no dividend payment in this year. As a reminder, the company did not payout a dividend in 2019 as well.
The proposal is subject to approval at the GSM which will be held on 21 August 2020.
Dividend per Share (HRK) & Dividend Yield (%) (2016 – 2018)
The decision not to pay the dividend in 2020 for 2019 is based on the business results achieved last year and the market forecasts for the product tanker segment in 2020 and the estimated costs related to refinancing and monitoring of the regulatory environment, but primarily due to the impact of COVID-19 on the world economy and the unpredictable duration and scale of recovery.
The company added a slowdown in the global economy due to the impact and consequences of COVID-19, seems like an inevitable outcome. The Company’s operations, which are extremely international, where they continuously generate 99% of their operating revenues, confront them with many challenges in a completely new, unpredictable economic environment. TNG states that they continuously strive to minimize business risk by negotiating a combination of spot market employment with time charters, but the volatility of the freight market requires increased responsibility for managing liquidity risk.
In the next two years, the Company also expects regulatory requirements that include the cost of ballast water treatment instalments, which they can classify at approximately USD 550,000 per vessel (which does not include transportation and installation costs). In addition to significant amounts of long-term loan commitments that affect cash flow risk, TNG also has liabilities to banks that require minimum liquidity in transaction accounts per vessel.
