The Board of Directors of Polymetal has decided to postpone the decision on the final dividend payment for 2021 due to geopolitical tensions announced by the Russian miner on Wednesday.
The company’s latest announcement has led Polymetal shares to lose 4% to 255p further hurting the stock.
The Russia Ukraine war has impacted Russian companies such as Polymetal in the worst ways with sanctions and bans. Significant changes in operating conditions that the group has experienced in recent weeks have been considered by the Board before delivering the company’s latest announcement.
As a result of this analysis, the Board has determined that it is no longer appropriate to recommend or declare the final dividend payment for 2021, which was scheduled to be presented to shareholders for approval at the Annual General Meeting on 25 April 202.
The Board has decided to postpone the dividend payment decision to August 2022 along with the interim dividend decision for 1H 2022 as a result of restrictions on Russian banks and the economy, which is increasing concern about the availability of funds for Polymetal.
Liquidity constraints and supply chain constraints have resulted in higher working capital requirements for the company whilst lower credit availability and a much greater cost of capital have put pressure on the balance sheet.
Due to the various factors standing in the way for the Board, the resolution on the 2021 final dividend payment that was scheduled to be presented to shareholders for approval at the Annual General Meeting on 25 April 2022 will be withdrawn.
A recent addition to the Board, Riccardo Orcel, Chair of the Board said “We have thoroughly re-evaluated the Board’s March recommendation on dividends taking into account recent changes in macro and regulatory environment and unanimously have come to a conclusion that the payment decision should be postponed in order to sustain the stability and liquidity of the business.”
“We will continue to monitor the operating, funding and regulatory conditions in which the business operates, hoping that stability is restored, improving visibility which would allow us to return to our cash distribution policy.”