Par Tim Hepher
PARIS (Reuters) – Thales France
On Tuesday, it became the last major company to cut its dividend, suspend profit forecasts and top up cash in response to the coronavirus crisis.
The aerospace and defense provider said it withdrew the proposed final payment of its 2019 dividend, saving 430 million euros ($ 465 million). The company has already paid an interim dividend of 0.6 euros, which means that the remaining 2.05 euros will not be paid.
Thales has also suspended its financial forecasts for 2020, which had assumed only a limited impact from the crisis, which are now anchoring airline fleets and taking hold of economies around the world.
“We want to limit the cash outflows that are not strictly necessary … to limit the economic and industrial impact on the group as much as possible,” Thales managing director Patrice Caine told reporters.
Thales said it has also signed a new € 2 billion credit facility that could be drawn down over the next 12 months, with the option of extending it for another 6 months.
At the end of last year, Thales had € 2.9 billion in cash or cash equivalents and an unused revolving credit facility worth € 1.5 billion, maturing in December 2021.
CFO Pascal Bouchiat said the resulting 6.4 billion euros of available liquidity “allows us to build up a fully sufficient liquidity reserve.”
The new line of credit, arranged and subscribed by Crédit Agricole
, is not supported by the guarantees offered by the French state to help companies get through the crisis, he added.
Airlines around the world have immobilized most of their fleets to cope with declining demand and travel restrictions designed to contain the coronavirus epidemic.
Thales says that 21% of its annual revenue comes from commercial aerospace activities such as air traffic management, the rest from defense, government agencies and private infrastructure.
Caine declined to comment on the reported disruptions in the French aerospace supply chain in detail, but said Thales’s operations in Singapore and Australia were operating almost normally.
Industry leaders said nearly half of small French aerospace suppliers have halted production at some point since the government imposed a lockdown to slow the spread of the coronavirus in mid-March, but that work resumes gradually.
“Today, I feel like the supply chain, like Thales, is in the recovery phase,” said Caine.
($ 1 = 0.9247 euros)
(Reporting by Tim Hepher; Editing by Sudip Kar-Gupta)