DOHA (Reuters) - The Chief Executive of AMEC Plc AMEC.L said global economic weakness means the British engineering group may be better off preserving cash rather than hiking the dividend, as some analysts have predicted it would do.
AMEC, which provides engineering and construction services to the energy industry, is riding high in part due to the boom of oil and gas investment prompted by strong prices.
The London-based company reported rising earnings in the first half of the year, which helped boost its cash pile to almost half a billion pounds, and last month it gave a strong outlook for 2012.
This prompted some analysts to predict a hike in the dividend. But Samir Brikho told Reuters this may not be prudent and that the market may not actually “appreciate” the move.
“Many in the industry at the current stage would prefer to hold back on the dividends and make a reinvestment in their vision and strategy in order not to loose their grip and to lose their position in the current economic uncertainties,” he said in an interview at the sidelines of the World Petroleum Congress in Doha.
“Nowadays we are in a second dip in the recession... who knows what’s going to happen next year or the year after, so we need to evaluate that situation on a yearly basis,” he added.
However, he said the company remained committed to raising its dividend, in line with earnings.
Reporting by Tom Bergin; Editing by Elaine Hardcastle