Saudi Airlines Catering postpones dividend distribution

Dubai - Saudi Airlines Catering is the first company in the GCC to announce withdrawal of dividend to ensure that it has sufficient cash to meet unforeseen challenges from the slowdown in the aviation sector and the overall economy.

Saudi Airlines Catering Co. on Sunday postponed dividend distribution, fearing that restriction in air travelling in the Kingdom of Saudi Arabia due to the Covid-19 coronavirus could impact its business.

Saudi Airlines Catering is the first company in the GCC to announce withdrawal of dividend to ensure that it has sufficient cash to meet unforeseen challenges from the slowdown in the aviation sector and the overall economy.

"The Board of Directors has issued a resolution to postpone the date of distribution of the Q4 2019 dividends to the company's shareholders, until further notice and after current conditions are settled," the company said in a statement posted on Saudi Arabia's stock exchange.

The International Air Transportation Association (Iata) on Sunday said the disruptions from Covid-19 could result in a passenger volume loss of 15.7 million and $3.1 billion loss in base revenue in Saudi Arabia. The disruptions to air travel could also put at risk over 140,300 jobs in the country.

"It is due to the difficulty in determining how long the duration of the precautionary and preventive measures taken by the competent authorities in the Kingdom to prevent the outbreak of Covid-19 will be. The outbreak is directly affecting air traffic to and from the Kingdom and consequently affecting related services such as inflight catering," it added.

The company said this decision has been issued as a precautionary measure in order to maintain the company's liquidity to be able to confront any possible risk associated with the continuity of precautionary and preventative measures taken against the new coronavirus (Covid-19) by the competent authorities," it said in a statement on Sunday.

waheedabbas@khaleejtimes.com

• Saudi Arabia