- Glencore Plc is scheduled to resume dividend payments to shareholders in 2021.
- Real estate players like Taylor Wimpey Plc, Land Securities Group Plc have already announced similar moves.
Glencore Plc (LON: GLEN) is set to resume its dividend payouts, and it is not the only one. Most companies had halted dividend payments as a safeguard measure against the Covid-19 volatility. As economic activities picked up lately due to various factors, several companies have announced the resumption of dividend payouts.
Glencore announced that it would resume paying dividends to shareholders in 2021 despite reporting a loss for 2020. The company, however, said that it clocked profit in the H2 of the year.
The company reported a net loss of US $1.90 billion for the whole year, way more than US $404 million loss reported in 2019. However, as against a US $2.60 billion loss in the H1, the Anglo-Swiss oil-and-mining company swung to a net profit of US $697 million in the H2 of the year.
In order to bring down its net debt, the FTSE 100 company had announced halting dividend payouts. But it has now announced that it would start dividend payouts and would pay US $1.6 billion in dividends.
The company’s CFO Steve Kalmin said that if the current prices hold, Glencore would be able to increase shareholder returns later in the year.
Glencore is not the only company that discontinued dividend payments. As the Covid-19 pandemic struck and economic activities across the globe hit rock bottom, about 75 per cent of the UK companies either suspended or cut dividend payouts. The Covid-19 led to a record drop of 57 per cent to US $16.4 million in underlying dividends in the second quarter.
The real estate players
The real estate sector managed to safeguard itself from the economic fallout of the pandemic. After some initial setbacks, the sector witnessed a surge in demand. Some of the big names from the sector have thus reinstated dividend payouts.
Taylor Wimpey Plc, one of Britain’s largest housebuilding companies, announced in November 2020 that it would be reinstating dividend payouts. The company had said that it was hopeful of paying ordinary dividend payments in 2021, beginning with the payment of the 2020 final dividend. The company also announced that it would review a special dividend in 2021 which would be paid in 2022.
Similarly, housebuilding company Persimmon Plc had said that as the company’s business activities returned to pre-Covid levels after restrictions eased, it will resume its dividend payout. The company had announced that it would pay a dividend of 40 pence on every share. Another prominent player in the sector Rightmove Plc too has said that it would be resume dividend payment when it would be prudent.
Property developer Land Securities Group Plc, which had suspended dividend payments in April, announced resumption of dividend payout in November 2020. The company said its payout plan would start with a 12 pence dividend payout in January. In the H1 2019, the company paid an interim dividend of 23.2 pence.
Other movers on dividend
Big oil companies like Royal Dutch Shell Plc and BP Plc had announced a cut in dividend payments as the sector took a beating from weak commodity prices, extreme volatility, and unsure demand outlook.
Some companies though were able to reinstate dividend payouts faster. Admiral Group Plc announced that it would pay its delayed special dividend at 20.7 pence per share. The company’s profits in the H1 2020 soared as limited travels meant fewer motor insurance claims. It had also announced increasing its interim dividend payout by 12 per cent to 70.5 pence.
Engineering company IMI Plc not only announced the resumption of dividend payouts but also recommended an interim dividend of 7.5 pence per share for 2020. The company had said it was able to restore payments as its performance was resilient in the first half ended June 2020.
The paper and packaging firm Mondi Plc had announced that it would shell out €236 million to shareholders as its business had remained largely resilient. Though it had suspended dividend payouts, but it managed to conduct its business activities smoothly as essential services could remain operational when the lockdowns were imposed.