March 26, 2020 / 7:55 AM / 3 days ago

UPDATE 1-Sandvik to cut costs due to coronavirus impact, reduces dividend

* Sandvik launches cost-cutting programme

* Short-term measures seen saving 1.5 bln SEK in 2020

* Cuts proposed 2019 dividend to 3 SEK/share from 4.50 (Adds background detail)

STOCKHOLM, March 26 (Reuters) - Swedish mining gear and metal-cutting tools maker Sandvik on Thursday launched large cost-cutting measures in response to the rapid global spread of the coronavirus and said it would reduce its proposed dividend for 2019.

While the company, a rival of Sweden’s Epiroc and U.S. group Kennametal, expects a limited direct impact from the outbreak on first-quarter results, it said effects seen ahead required it to review costs both short-term and long-term.

“The coronavirus situation has escalated around the world and we have to adapt to this dramatic change in global business conditions, Sandvik CEO Stefan Widing said in a statement.

The company said temporary short-term actions primarily related to reduced working hours was seen generating savings of about 1.5 billion crowns ($148 million) this year, adding group management would also cut their salaries by 10% while the short-term work schemes are in place.

Long-term structural measures were at the same time seen creating savings of about 900 million crowns, with the full annual run-rate by the end of 2021.

It said the measures would lead to 1.4 billion in one-off expenses in the second quarter.

Sandvik’s board said it now proposed a 2019 dividend of 3 crowns per share versus the previous proposal of 4.50 crowns. ($1 = 10.1407 Swedish crowns) (Reporting by Johannes Hellstrom; editing by Simon Johnson)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below