Saffron: the mood falls

financial objectives abandoned, dividend abolished

Faced with the coronavirus crisis, Safran announced Thursday evening that it had withdrawn its proposal to pay dividends for the 2019 financial year, and also abandoned its financial targets for 2020 … By renouncing the payment of the dividend, Safran will save the disbursement of one billion euros, the group said in a statement.

The aeronautics and defense group also announced the establishment of a line of credit of 3 billion euros to adapt to the context created by the coronavirus epidemic.

The group clarified that this new line of credit of 3 billion euros comes on top of its current line of 2.52 billion euros not drawn to date, so that it estimates to have “sufficient liquidities to finance the continuation of his activity. ”

Uncertain impact of the coronavirus on group customers

The world’s third largest aeronautical equipment supplier, Safran also announced that it would amplify the cost reduction measures implemented since Boeing suspended production of its B737 MAX, the engines of which Safran is building in partnership with General Electric.

“Given the unprecedented nature of the situation, the future impact still uncertain for its customers of the global measures adopted to stem the pandemic, Safran is withdrawing the 2020 targets announced previously,” said the French group. “When the impacts on activity and the adjustment measures can be assessed with sufficient precision, Safran will share them with the financial community,” said Safran.

The title fell by 2.2% this Friday to 90 euros after its recent rebound. Among the latest broker opinions, Berenberg remains to be ‘kept’ on the file, but with a target price reduced from 115 to 85 euros.

© Reuters


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