IAG announces maiden dividend ahead of results
Published 30/10/2015 | 02:30
Aer Lingus' new owner will pay its first ever dividend in December, the company said yesterday.
International Airlines Group (IAG), which also owns British Airways and Spain's Iberia, is due to announce profits for the third quarter of its financial year today.
Those figures will be the first to include revenue and profit from Aer Lingus, which it bought in a €1.4bn deal that closed six weeks ago.
The decision to announce the 10 cent a share dividend ahead of the results is seen as an indicator that IAG boss Willie Walsh is ready to announce a strong set of financial numbers today - including profits that are forecast to be in excess of €1.2bn.
"We're delighted to announce IAG's first dividend payment of 10 euro cents per share," Mr Walsh said.
"For the full year we expect to pay out 25pc of our underlying profit after tax in dividends and plan to announce a proposal for a final dividend for 2015 when the full-year results are published."
The interim divident pay-out will be paid to eligible shareholders who hold IAG stock on December 4.
Shareholders in IAG have not received a dividend since the group was formed in 2011 from a merger of Iberia and British Airways in an all-share deal.
Before that, neither of the two companies had paid a dividend since 2008.
Former Aer Lingus shareholders will not share in the payout, because it was acquired in an cash transaction.
Shares in the airline group closed down 2.13pc today at 597 pence each in London, and at €8.33 in Madrid, following the announcement.
IAG has cut thousands of jobs and reduced capacity since the airlines combined.
The maiden dividend, and promise to continue with shareholder payments, is a signal of IAG's confidence in its profit growth, which will come into sharp focus today when the airlines group is expected to post a jump in third-quarter profit.
Excluding Aer Lingus, which was only part of IAG for six weeks at the end of the last quarter, the business is forecast to report operating profits of almost €1.2bn from €900m a year earlier. On top of that, analysts at broker Goodbody expect the Irish carrier to have generated an additional €60m in profits.
In Dublin last week Willie Walsh said the group is already looking at further potential acquisitions. (Additional reporting Telegraph)