KN to pay EUR 5 million as dividends to shareholders
The operator of the oil and liquefied natural gas (LNG) terminals, KN, offers to pay dividends of EUR 5 million to shareholders (EUR 0.013 per share), i.e., 45 % of the adjusted net profit of the company.
KN’s dividend policy stipulates that, on the proposal of the company’s management, the board determines the amount of dividends proposed annually, taking into account the company’s financial indicators and strategy. In 2020, the company received EUR 77.5 million, and the EBITDA amounted to EUR 45 million. The company’s adjusted net profit for the year 2020 was EUR 11 million.
Prior to the shareholders’ decision on the payment of dividends and the share of profits to be paid in dividends, the KN management performed a sensitivity analysis of the financial condition for the period up to 2030, especially taking into account the uncertainty about oil handling volumes and other financial indicators. The aim was to assess the impact that reduced cash flows, due to adverse circumstances, could have on the company’s income and profits, both through current dividend payments, the retention of funds within the company, and the impact of such a decision on the implementation of the long-term strategy.
‘In 2021, KN’s performance continues to be impacted by the international pandemic, still affecting the oil segment. We will also feel the negative impact due to the suspension of the handling of Belarussian oil products through KN terminals in Klaipėda, which started at the beginning of the year. The decision on the specific amount of dividends is made taking into account the market uncertainty and responsible cash flow planning for the implementation of the strategy in the long term’, says Darius Šilenskis, CEO of KN.
The company’s management made a decision on dividends based on the company’s earned adjusted net profit in the year of 2020. That is, the unrealised change in foreign exchange rates and the related effect of deferred income tax arising from the requirements of International Financial Reporting Standard 16, ‘Leases’ on accounting for lease liabilities and assets, and the effect of derivative financial transactions are eliminated from net profit. Since the exchange rate of the dollar and the euro fluctuates constantly, unrealised exchange rate losses or gains are recognised in the statement of comprehensive income, which may result in either an unreasonable decrease or increase in the company’s profit. KN is neither able to predict nor control the financial results determined by the exchange rate fluctuations.
The proposal by KN management must be approved by the company’s shareholders at the general meeting which will be held on April 30, 2021.
Currently, the company’s board consists of Mantas Bartuška, Dainius Bražiūnas and independent board members, Giedrius Dusevičius, Bjarke Pallson, and Ian Bradshaw.
72.32 % of the shares belong to the state, 10.41 % are owned by the UAB concern ‘Achemos grupė’ and other shares belong to small investors. The company has been listed on the ‘Nasdaq Vilnius’ stock exchange since 1996.
