EPP mulling an interim dividend


EPP mulling an interim dividend

Published Date: 2020-06-30 | Source: Stephen Gunnion | Author: Stephen Gunnion

EPP mulling an interim dividend

The Polish property investor already pulled its previous payout as it focuses on ways to strengthen its balance sheet and retain maximum liquidity.

EPP says it will consider paying an interim dividend as Poland bounces back from Covid-19 lockdown restrictions. However, the real estate company, previously called Echo Polska Properties, has warned of a decline in full-year earnings to between 4 euro cents and 5 euro cents per share, down from 7.49c last year, following the pandemic.

In a pre-close update, EPP said the Polish government's fast and effective response to Covid-19 had resulted in a reopening of the economy sooner than expected. While retail footfall levels at its shopping centres across the country had continued to improve steadily since they were reopened on 4 May, it said it would take some time for retail turnovers to return to pre-pandemic levels.

Collection rates in its retail portfolio averaged 84% for the three months to end-May, down from 99% under normal conditions, as some of its tenants faced cash flow problems and due to protracted negotiations on rental discounts with some tenants. With talks winding up, it expected collection rates to return to pre-Covid levels in the coming months. Lockdown restrictions imposed by the Polish government didn't affect its office portfolio, with all tenants legally obliged to pay their rent in full.

Although performance metrics and the projected path to recovery were encouraging, the group said the need to provide significant financial support to tenants and the loss of revenue meant it had to focus on ways to strengthen its balance sheet and to retain maximum liquidity. It withdrew its 5.82c dividend for the six months to end-December as it assessed the impact of Covid-19 on its operations.

Its shares rose 7.7% to R9.15 yesterday.

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