Irish Ferries owner Irish Continental Group has scrapped plans to pay a final dividend of almost €17 million on last year's earnings, as it seeks to save cash amid a slump in passenger numbers as a result of the coronavirus crisis.
The company, led by chief executive Eamonn Rothwell, will hold its delayed annual general meeting (agm) on July 28th, it said in a statement on Wednesday.
“It is very difficult to estimate the full year financial impact [of the Covid-19 pandemic] on the ICG Group as the reduction in passenger revenue will be material,” ICG said.
“While the company retains a strong liquidity position, the directors consider it prudent not to proceed with the final dividend payment against this background of market uncertainty and will no longer propose a resolution to approve the dividend at the agm.”
While many Irish and overseas companied moved in the final two weeks of March to abandon final dividend payment plans, ICG decided on March 25th to postpone a decision on the matter by delaying its agm, which was originally set for May 12th.
The introduction of travel restrictions across the EU since March has led to a significant reduction in current passenger traffic and forward bookings for what is normally the peak summer passenger season for ICG’s Irish Ferries service, the company said.
In a trading update in the middle of last month, ICG said passenger numbers for the year to early June had slumped 60 per cent. However, its freight business had remained relatively robust during the coronavirus pandemic. Roll-on, roll-off freight volumes were down 4 per cent in the year to June 6th, while container volumes had dropped 13 per cent.
Mr Rothwell warned on Tuesday that any move by the new Government to extend a subsidy scheme to keep certain sea routes going during the Covid-19 pandemic would be a “waste of taxpayers’ money” and further distort the market.
The last government committed at the start of April to provide up to €15 million of so-called public service order (PSO) subventions for three months on loss-making ferry routes between Dublin and Cherbourg, Rosslare to Fishguard and Pembroke in Wales, and to Cherbourg in France and Bilbao in Spain.
Officials who report to Hildegarde Naughton, the new super junior minister for international transport, are considering an extension of the current PSO, which runs to this middle of this month.
ICG, owner of Irish Ferries, was due, along with Swedish-owned Stena Line and France's Brittany Ferries, to be the beneficiaries from the subsidy. However, ICG said last month that it had not participated in the initiative, saying the model was "liable to create distortions in the marketplace and could be open to legal challenge".
Mr Rothwell said that he has pitched alternative proposals for rebates on port fees or the State making a contribution on the amounts of freight units moved by ferry operators, without success.