Aeroflot Board of Directors Recommends Not to Pay 2019 Dividend

The board of directors of Aeroflot has recommended shareholders not to pay dividends for 2019, the company said in a statement on Friday. The decision was considered at the board meeting and supported by the maximum number of votes.

The decision was taken due to a substantial negative impact of the crisis related to the coronavirus pandemic on Aeroflot operations, the statement said. The annual shareholders meeting will be held on July 27, TASS writes.

The Russian government recommended that its representatives on the board of directors of Aeroflot airline not support the payment of dividends for 2019 at the company’s annual meeting of shareholders. This is according to governments order.

“[Hereby it is recommended that] the Ministry of Finance, the Ministry of Transport and the Federal Property Management Agency when preparing draft directives to representatives of interests of the Russian Federation for participation in the meeting of the board of directors and in the annual general meeting of shareholders of PJSC Aeroflot-Russian Airlines should not provide for the payment of dividends for 2019,” the document says.

Based on the results of work in 2018, Aeroflot allocated 2.86 billion rubles ($40.5 mln) to pay dividends.

The net profit of the Aeroflot group according to international financial reporting standards at the end of 2019 amounted to 13.5 billion rubles ($191 mln), according to the company’s statements.

The Russian state holds the controlling stake in Aeroflot (51.2%) through the Federal Property Management Agency, the Rostec Group owns 3.5% of the shares, and institutional investors – 39.6%. The meeting of Aeroflot’s board of directors, at which it was planned to consider dividend payment, was held on July 2, the annual meeting of shareholders is scheduled for the end of the month.