Sweden’s equipment manufacturer Dometic Group warned of a negative impact on demand and financial results in the company’s first quarter, and withdrew the previously proposed dividend for investors
As a result of the COVID-19 pandemic and an increasing number of countries closing their borders, Dometic announced today that it expects negative effects on the world economy, along with specific markets where the equipment manufacturer has production and sales. “The rapidly changing market situation due to the spread of the Coronavirus has had a negative impact on the demand of Dometic’s products in the first quarter.” The statement continued to say the company expects, “the second quarter will be negatively affected as well, due to the uncertain situation and expected challenging market conditions.”
According to today’s statement, Dometic is taking considerable measures to mitigate the effects, such as capacity adjustments, cost reductions, use of government support programs and reduced capital expenditure to maintain financial stability. The company said it was not currently possible to quantify the financial effects of the crisis given the exceptional and uncertain market conditions.
Dometic also advised that it was withdrawing the proposed dividend of per share SEK 2.20 per share (an increase from SEK 2.15 the previous year) as previously announced. ”Under the prevailing circumstances, a dividend is no longer justifiable as the company and the Group may need increased financial preparedness going forward,” it explained. ”In the event market conditions stabilize during the year, and the company’s financial position allows, the Board may later in the year convene an extraordinary shareholders´ meeting in order to decide on a dividend.”
Headquartered in Stockholm, Sweden, Dometic employs approximately 7,200 people worldwide, had net sales of approximately SEK 18.5 billion in 2019 (€1.75 billion). As reported by IBI in January, marine sales represented 27% of the company’s total sales last year, up from 26% in 2018.