BAE Delays Dividend to Conserve Cash

(Bloomberg) -- BAE Systems Plc, Europe’s largest defense firm, will defer its dividend as it prepares for an increased impact from the coronavirus outbreak.

The U.K. company said Friday that the pandemic had “no material impact” in the first three months of 2020, with weapons orders still flowing and its factories operating, albeit with changes to safeguard staff.

That’s beginning to change going in the second quarter, with “more significant disruptions,” BAE said, prompting it to implement cost-control measures to limit the impact on its finances.

“We continue to assess the impact on our business of the measures announced by national governments,” the company said. “Whilst it remains our intention to pay a dividend, the timing of any payment will be contingent on prevailing macro-economic and social conditions over the coming months.”

BAE said that though it’s in a strong position with a large order backlog, it’s not possible yet to predict the impact of the virus on the 2020 results. The company plans to go ahead with the $2 billion purchase of U.S. defense-technology assets from Raytheon Inc. and United Technologies Corp.

BAE will give an update on dividend plans with half-year numbers on July 30.

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