KN, the operator of the oil and liquefied natural gas (LNG) terminal, will pay the amount of 7.9 million Euros (EUR 0.02 per share) – the total net profit for 2019 – in dividends to their shareholders. This is the third year in a row that the company has paid 100 percent of net profit in dividends, and the decision to continue the practice was made by the shareholders of KN at today’s general meeting of shareholders.
KN's dividend policy stipulates that the company’s board must determine the proposed amount of dividends based on the company’s net profit, financial indicators and the implementation of the strategy. KN’s income in 2019 amounted to 104 million Euros. During the reporting period, the company's EBITDA was 65.8 million Euros.
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. This analysis provided an assessment of how the Company’s income and profits wold be affected by a decrease in cash flows due to adverse circumstances, both as a result of the current payment of dividends and the retention of funds within the Company.
“KN has a sufficient financial reserve to implement the planned investments and financial commitments,” says KN CEO Darius Šilenskis. “The financial sensitivity analysis shows that, CN would be able to pursue its strategy by continuing its investment projects at the CN oil terminal, regardless of whether dividends will be paid, even in adverse circumstances. These investment projects include achieving ambitious goals through the development of the international LNG business line, as well as implementing a long-term LNG supply to the Lithuania project.“
According to D. Šilenskis, paying dividends and financing infrastructure projects with borrowed funds creates higher value for shareholders, taking into account the rates of return on KN capital and the price of borrowed capital on the international financial markets.
“Currently, the price of borrowed capital in the markets is still extremely attractive and competitive. Therefore, by paying dividends, we aim to increase our operational efficiency while simultaneously creating the greatest benefit for the company’s shareholders. We understand that in the context of quarantine, all additional income may be especially needed,” says D. Šilenskis.
Based on the amount allocated to KN dividends, KN will pay 5.5 million Euros to the state, and approximately 780 thousand Euros to the second shareholder KN – UAB concern “Achemos grupė” . It is estimated that KN has paid 34.5 million Euros in dividends to the state over the last five years. In 2019, the KN was also among the largest taxpayers in the country, paying over 168 million Euros of various taxes to the budget.
Currently, 72.32 per cent of the shares belong to the state, 10.41 per cent of the shares are owned by UAB concern “Achemos grupė”, and the other shares belong to small investors. Since 1996, the company has been listed on the Nasdaq Vilnius Stock Exchange.
