- Austin Engineering (ANG) has announced withdrawing its earnings guidance for 2020
- Colombian and Peru manufacturing facilities have closed as Government’s orders coronavirus shutdowns to take effect in South America
- Austin has instituted sweeping COVID-19 controls to prevent employee infections and to protect business continuity
- The company will defer interim dividend until at least September 2020 to conserve cash
- Austin Engineering is trading flat at 11.5 cents per share
Austin Engineering (ANG) has announced it will be deferring dividends and must review earnings guidance as COVID-19 smashes 2020 forecasts.
The company said it’s shelving its $0.02 per share interim dividend until at least September of this year.
“It is the board’s responsibility to make the best decision for shareholders and we believe that deferring payment of the dividend at this time conserve cash is the correct decision,” Chairman Jim Walker said.
The company’s withdrawal of earnings is linked to some realistic projections about the virus’ impact on the countries the company produces the most from.
Austin Engineering has anticipated greater shutdowns and disruptions throughout Q2 as the virus starts to peak in the US and Australia.
Austin’s earnings guidance of $24-$28 million is now up in smoke, with the Managing Director Peter Forsyth committing to reviewing guidance and updating the market when a clearer picture can be obtained.
“Austin is engaging with its employees, customers and suppliers to best isolate the business from disruption, to ensure that the group continues to supply quality products to our customers for them to meet their production goals” he said.
The Queensland based mining equipment manufacturer has production facilities right across the globe, with the largest located in Perth, the U.S., Chile and Indonesia.
Its Colombian and Peruvian facilities have been shut by order of their respective Governments, in efforts to stop the spread of COVID-19 across South America.
South America was one of the last continents to be majorly affected by the virus and has taken some of the strongest action to stop the spread of the COVID-19 before it takes hold.
The company does not however believe that this will have a material impact on revenue, owing to the small contribution those two manufacturing facilities make to the company’s bottom line.
The Perth facility is producing at a rate of knots, with its highest activity level recorded since Western Australia’s mining boom faded several years ago. Austin Engineering is trading flat at 11.5 cents per share at 10:18 am AEDT.