By Olivia Bugault

 

Safran SA trades slightly down after it announced late Thursday that it scrapped its 2019 dividend and withdrawn its guidance for the year on the back of the coronavirus pandemic.

At 1121 GMT, Safran, a member of the French CAC 40 index, trades 2.2% lower at EUR89.98, outperforming the benchmark index, which is down 3.7%.

The French aerospace-and-defense company said that it has scrapped its dividend of 2.38 euros ($2.61) per share, which would have represented roughly EUR1 billion in outflow. The decision will help support the company's liquidity and the continuity of its activities, Safran said.

Safran has secured a new credit line of EUR3 billion and withdrawn its 2020 guidance citing the "unprecedented nature of the situation and the remaining uncertain impact for its customers of worldwide measures taken to contain the pandemic."

These measures don't come as a surprise as most of its peers have already done it, Jefferies says.

Safran has also said that actions already put in place in December 2019 to deal with the Boeing Co.'s 737 MAX crisis have been intensified. The measures include pausing its capital expenditures and reducing costs. Safran added that it will use short-time working.

"It's hard to tell how much more action is being taken over and above measures already implemented to address the shutdown of 737 MAX production," Jefferies says.

The company added that its plants are fully working in China, while activities are gradually restarting at European sites.

 

Write to Olivia Bugault at olivia.bugault@wsj.com

 

(END) Dow Jones Newswires

March 27, 2020 08:03 ET (12:03 GMT)

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