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Africa-based Fuel and lubricant distributor firm Vivo Energy (LON:VVO) told investors it intends to still pay out US$34mln of dividends, for now.
Vivo has withdrawn guidance for 2020, previously provided in early March, amid the coronavirus (Covid-19) uncertainty.
In a statement detailing the business impacts of the pandemic, the company said that it retains a strong balance sheet, though as it is a rapidly evolving situation the board may review its dividend recommendation ahead of its AGM (presently scheduled for 20 May).
Trading in the year to date has been in line with expectations, the company said, with only minimal impact from the virus – only a comparatively small number of cases have so far been confirmed in the 23 African countries that Vivo operates in – but, it noted that in recent days governments have begun taking decisive actions.
As fuel is a critical resource the company noted that its retail sites remain open and it continues to supply commercial customers, albeit there has been a reduction in volumes for aviation and transport customers.
Vivo highlighted that it has implemented a range of measures to protect staff – including travel restriction, remote working and the rotation of staff at certain sites – and it is supporting the authorities and communities.
It has donated fuel to Ministries of Health, made financial donations and is using lubricants blending facilities in Mombasa in the production of hand sanitiser for the Kenyan Government.
The company described its financial position as “strong”. It had US$400mln of cash on hand at the end of 2019, long-term debt amounted to US$400mln and it had some US$1.7bn of short-term capital resources (including multi-currency revolving credit facility, and US$1.1bn of unsecured short term facilities).
Looking ahead, Vivo said: “the company has taken steps to update its business continuity planning to ensure we can continue to operate efficiently and has taken the decision to reduce marketing spend and discretionary uncommitted capex in order to manage our expenditure.
“We are closely monitoring stock levels and credit exposure to ensure that these continue to be managed effectively in light of the changing demand.”
Source : https://www.proactiveinvestors.co.uk/companies/news/915739/vivo-energy-still-intends-to-pay-dividend-withdraws-2020-guidance-915739.html