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Home appliance giant Electrolux is now taking a 180 degree turn. The company’s board of directors proposes a dividend of SEK 7 per share for the financial year 2019.
– It’s about seeing a recovery in earnings and cash flow, says Åsa Öhman, press manager for the third quarter and continues:
– Now you also see a collected demand.
Pay
The company was one of several that used layoff support during the corona pandemic, support that will now be reimbursed by the company.
Another company that recently reported on repaid layoff support is Bravida. The announcement was made in connection with the installation company’s decision to pay the leisurely dividend to homeowners this fall.
Previously, several real estate companies such as Holmen and Husqvarna had chosen to resume dividends and construction giant Skanska proposed a dividend of SEK 3.25 per share this week by withdrawing proposals of SEK 6.25 per share in March during the pandemic of the crown.
However, there may be more companies on the way forward, according to SEB equities analyst Esbjörn Lundevall.
– Electrolux was a guess we had until yesterday. These are companies that do not rely on support money or have not had to use support money on a large scale and where the effects of the pandemic have been limited, he says.
More companies are online, analysts believe. Many companies have stagnant coffers.
– Either there will be a dividend this fall or additional dividends next year, says Maria Landeborn, an analyst at Danske Bank.
Reward shareholders
As an example of companies that can reward shareholders already this fall, Esbjörn Lundevall looks to hygiene products manufacturer Essity, which has announced that it will hold an extraordinary general meeting in November.
– When it comes to Essity, it may not be that positive at the moment, but that’s when the pandemic was happening. In Essity’s case, it was wise not to pay due to the uncertainty, but there was no financial reason and now that nothing more dramatic seems to be happening, it may seem rational to turn around.
For companies that now choose to withhold the dividend for this year, there may be talk of hefty additional dividends in 2021. Like Maria Landeborn, Esbjörn Lundevall has some advice:
– You might think that banks, in any case, have every opportunity to do so in terms of results and balance sheets. Then of course there is a lot of politics, but of course they have room.
Volvo another example
Another example is Volvo. During the corona pandemic, there was even negative order entry and stocks bottomed below the 100 mark. The SEK 5.50 dividend was withdrawn, but with a large cash flow there is a possibility of a dividend additional next year. Esbjörn Lundevall does not believe that the company will change and distribute already during the fall.
– Volvo has needed support money and it is a cyclical industry and it has been messy, so it is more reasonable to change next year and wait now.
Other examples could be Sandvik and Assa, according to Landeborn.
Tobias Österberg / TT
Olle Lindström / TT
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