NZ’s Auckland Airport revises dividend policy, shares fall

By Ayushman Ojha

(Reuters) -New Zealand’s Auckland International Airport (AIA) said on Wednesday it has revised its dividend policy and will now pay its shareholders only 70% to 90% of underlying net profit after tax, sending its shares to their lowest in nearly five months.

The revision is a downgrade from AIA’s previous policy to pay 100% of underlying net profit after tax, and comes after the Auckland Council voted on Friday to sell 7% of its 18.09% stake in AIA as part of a plan to reduce debt.

AIA shares fell as much as 3.6% and were the top losers on the benchmark S&P/NZX 50 index, which was down 0.2%.

AIA shareholders have not received dividends since the company scrapped interim dividend in March 2020 to tide over the financial hit from the coronavirus pandemic.

“We see today’s decision to lower the dividend policy as a prudent one which would help to mitigate the risk of an equity raise scenario; whilst noting that in isolation it will not determine whether additional equity is required,” analysts at RBC Capital Markets said in a note.

Under special circumstances, directors may consider payment of ordinary dividends above or below the given range, AIA added.

Earlier in February, the airport operator said it would be reviewing its dividend policy later in the 2023 financial year, with dividends expected to resume in October 2023.