March 25, 2020 / 7:35 AM / 6 days ago

Plane parts maker FACC drops dividend, re-evaluates Croatia deal

VIENNA (Reuters) - Plane parts maker FACC (FACC.VI) said it would not pay a dividend for last year and would re-evaluate a 33-million-euro ($36 million) project in Croatia as part of measures to deal with falling demand due to the coronavirus.

The group, owned by China’s Aviation Industry Corporation (AVIC) (000768.SZ), said in view of a global slump in air traffic and strong fluctuations in orders, it would cut working hours for much of its staff from April 6 for at least three months.

“The situation is very uncertain and changes daily or hourly,” Chief Executive Robert Machtlinger said. “We have to find an optimal balance between protecting our workforce... and struggling to achieve the necessary economic stability, secure financial stamina and maintain the trust of our customers.”

New orders from existing and new customers worth $800 million were a good sign, he said.

The coronavirus pandemic has rocked airlines and planemakers and put them under pressure to save cash. Boeing (BA.N) has announced it would halt production of most widebody jets. Airbus (AIR.PA), which accounts for around half of FACC’s revenues, resumed partial output on Monday after a four-day shutdown.

FACC makes components for wings, tail assemblies and fuselages as well as engines and cabin interiors for all major planemakers. It employs 3,500 people in 13 countries, many of them in its home country.

Austria has introduced a 38-billion-euro aid package in response to the coronavirus crisis including subsidies for short-time work agreements under which the state takes over compensation payments and social security and tax contributions.

The impact of the coronavirus on FACC’s 2020 and 2021 earnings was difficult to assess, and a detailed forecast might not be possible until summer, the group said.

FACC announced last year that it would build an automated digitized production complex in Croatia that was expected to start production in 2021. Now that would be re-evaluated as part of a general investment review, FACC said, although it still planned to continue the project.

Reporting by Kirsti Knolle; editing by Thomas Seythal and Nick Tattersall

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