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ACCIONA: CUTS THE SINGLE DIVIDEND AGAINST FY2019 RESULTS BY 50% (ANÁLISIS BANCO SABADELL)

The company has just released that as a result of the crisis brought by Covid-19 and under a criterion of financial caution, it has cut the single dividend against FY2019 Results by 50%. Thus, the dividend has been cut from € 3.85/sh. announced to € 1.925/sh. (-45% v. 2018; 2.2% yield). Furthermore, the company set a maximum period of 12 months for its payment, and thus, the dividend could be paid in 2021.
Negative news. We expected the company to pay the full DPS. The reason behind the cut+possible delay is explained by the current economic environment due to the Covid-19 crisis. On the positive side, this measure will reinforce the group’s balance sheet although to a limited extent. Note that the company’s NFD/EBITDA ratio’19 came in at around 4.0x (inc. IFRS16) and its liquidity position at the end of 2019 stood at around € 4.5 Bn (including € 2.84 Bn of available credit lines) vs. € 2.65 Bn of maturities in total between 2020 and 2021. Based on the revision of estimates we intend to carry out assuming our scenario of V-shaped recovery, ANA’s NFD/EBITDA’20e would stand at ~5x (incl. IFRS16 and excluding the divestitures expected of € 500 M, which we now believe are more complicated), and thus, the dividend cut will contribute to reducing the ratio slightly to around 4.8x (assuming the payment in 2021). In order to preserve the NFD/EBITDA ratio, the company could cut CAPEX’20, although to the detriment of growth, and thus this option (the dividend cut) will most likely make more sense with a long-term view.