Clinic operator - Fresenius cancels dividend after state aid for clinics
Shareholders of the healthcare group Fresenius will receive nothing in dividends for the current year. The Management Board has decided to withhold state energy subsidies of up to 300 million euros for its hospital subsidiary Helios and not to repay them, the DAX-listed company announced on Tuesday evening in Bad Homburg. This means that no dividends can be paid to shareholders and no bonuses can be paid to managers. The Supervisory Board is expected to approve the decision this Wednesday.
Fresenius had already received almost 160 million euros from the "energy relief package" from the German government by the end of September. This was intended to cushion the rise in energy prices in the wake of the war in Ukraine. With the acceptance of the money, a legal threshold was exceeded, which means that no bonuses may be paid to managers or dividends to shareholders for this year.
Fresenius CEO Michael Sen had already hinted at a dividend waiver at the beginning of November and announced a legal review. "Not all of our shareholders are dividend-oriented," Sen said at the time.
Far-reaching restructuring
The company could also have repaid the energy subsidies, which would have cleared the way for a dividend payment. However, Fresenius wants to use the waiver of the dividend payment to reduce the high level of debt that the Group has accumulated following a series of takeovers and which is being squeezed by the rise in interest rates. A lot of money is at stake: analyst Sven Kürten from DZ Bank estimated the dividend remaining in the Group in 2023 at 516 million euros. The suspension of the dividend and the state aid support "the long-term strengthening of the company", explained Fresenius.
For the future, however, the crisis-stricken group, which is undergoing far-reaching restructuring, is sticking to its policy of increasing or at least constant dividends, it said. Fresenius considers the linking of energy subsidies to dividend and bonus payments to be unconstitutional and has announced that it will take legal action. Fresenius had distributed a dividend of 92 cents per share for 2022.
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- The decision to withhold the dividend affects shareholders of the healthcare group Fresenius in Hesse, Germany.
- The Clinic operator Helios, a subsidiary of Fresenius, received energy subsidies totalling up to 300 million euros from the Federal Government's "energy relief package."
- Due to accepting the subsidies, Fresenius is now unable to pay bonuses to managers or dividends to shareholders, according to German law.
- Michael Sen, CEO of Fresenius, had previously hinted at a possible dividend waiver, citing that not all shareholders are dividend-focused.
- Fresenius is utilizing the waiver of the dividend payment as an opportunity to reduce its high level of debt, which has accumulated due to a series of takeovers and rising interest rates.
- Despite the current situation, Fresenius remains committed to its policy of increasing or maintaining dividends in the future, with analysts estimating a dividend of 516 million euros remaining in the Group for 2023.
Source: www.stern.de
