European companies ditch dividends to save cash

(Reuters) – European companies are scrapping dividends to maintain cash and comply with regulations in response to the financial havoc caused by the spread of the new coronavirus.

Companies have been racing to cut dividends as lockdowns of major cities crush businesses, drying up their cashflows, with banking authorities and national governments also rushing to regulate financial institutions and state-owned companies.

More than 80 of the top 600 listed companies in Europe cut or scrapped dividends between Feb. 24 and April 8, a Reuters analysis found. Among the latest to suspend dividends were French aerospace and defence supplier Thales and Swedish metal-cutting tools and mining gear maker Sandvik on Tuesday. UK-listed companies could cancel about $60 billion in dividends this year, according to a report by analytics company Link Group.

(GRAPHIC: European companies cut dividends – https://fingfx.thomsonreuters.com/gfx/mkt/xklvybgepgd/dividends.PNG)

(Reporting by Milla Nissi and Sarah Morland in Gdansk; Editing by Josephine Mason and Tomasz Janowski)