VIENNA (Reuters) - Engineering group Andritz (ANDR.VI) plans to more than halve its payout to shareholders after a 13% drop in its 2019 core profit, it said, as it announced further capacity cuts due to weak demand from the car industry.
The Austrian company, which supplies plants and systems to the auto, pulp and paper, and metal manufacturing industries, expects a slight increase in sales and a flat core profit (EBITA) this year.
The forecast largely banks on orders for its pulp and paper business and does not include potential effects from the coronavirus outbreak, Andritz said.
“As far as our markets are concerned, the global economic environment remains challenging and highly uncertain as a result of the outbreak of Covid-19,” Chief Executive Wolfgang Leitner said, referring to the virus.
“With the adjustment measures planned for this year, we are taking the steps needed to ensure the group’s competitiveness and profitability in the long term.”
The ongoing restructuring programme at its German Schuler unit, which supplies the automotive industry with products such as hydraulic presses and coil feed lines, is expected to start contributing to earnings from year-end.
Andritz had announced to cut 500 jobs at Schuler due to weak investment activity in the automotive industry and a shift in demand towards Asia.
The company said it also made provisions for smaller cost savings and restructurings in other business units.
2019 earnings before interest, tax and amortisation (EBITA) fell to 343 million euros (298.8 million pounds) largely due to restructuring costs on 10% higher sales of 6.67 billion euros.
Andritz said it plans to cut the 2019 dividend to 0.70 euros per share from 1.55 euros the previous year.
Reporting by Kirsti Knolle; Editing by Jan Harvey