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SalMar scraps £187m dividend because of coronavirus uncertainty

SalMar's Ocean Farm 1 offshore salmon facility. The company said it was important that it is able to take strategic opportunities that will come in the future, including offshore fish farming. Photo: SalMar.
SalMar's Ocean Farm 1 offshore salmon facility. The company said it was important that it is able to take strategic opportunities that will come in the future, including offshore fish farming. Photo: SalMar.

Norwegian salmon farmer SalMar today scrapped plans to pay shareholders a dividend of NOK 21.00 (£1.65) per share for 2019 because of the “critical situation” coronavirus has placed society in.

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The dividend pay-out would have cost SalMar NOK 2.37 billion (£187m).

In a market announcement, SalMar stated: “The decision was made after thorough assessments by the board and administration on the basis of the uncertainty that now prevails regarding the spread of coronavirus disease (Covid-19) and the consequences it may have for the entire value chain and a number of local communities along the coast.”

It added that food production is a vital activity for the society and must be protected in every way.

Strategic opportunities

“The Board of Directors and the company now give the highest priority to the work to take the necessary measures in a situation of great uncertainty,” stated the company, which shares ownership of Scottish Sea Farms with fellow Norwegian salmon farmer Lerøy.

“It is also important for the Board to ensure that SalMar is able to take strategic opportunities that will come in the future, including offshore fish farming. This to position the company for continued growth and to ensure continued solid returns to shareholders over time.

“In the current situation, the Board of Directors believes that not to pay dividends is a proper measure to safeguard the interests of both society and shareholders.”

Strong balance sheet

SalMar said it had a strong balance sheet and a low debt ratio, and the decision not to pay a dividend was therefore “exclusively linked to the national and global situation that has arisen and does not entail any change in the general dividend policy, with predictable payment of surplus liquidity as the foundation”.

The company said it is now working “to ensure the best possible channels to get our amazing sustainable product out to customers all over the world”.

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