Based on year-to-date investment income outcomes and its forecast FY20 insurance profit, largely driven by the ongoing coronavirus pandemic, IAG says there is presently limited scope to pay a final dividend in September 2020.
This is after application of the upper end of IAG’s 60-80% of full year cash earnings payout policy and after allowance for the 10 cent interim dividend paid in March 2020.
IAG’s board will determine the quantum of any final dividend in August 2020 in line with its normal timetable, taking into account the company’s FY20 financial performance, which will be finalised at that time.
As of April 2020, IAG’s investment income on shareholders’ funds amounted to a financial year-to-date loss of approximately $280 million pre-tax.
IAG says its weighting towards growth assets in its shareholders’ funds portfolio has materially reduced from the 49% allocation at 31 December 2019, to under 30% at 30 April 2020.
As specified in its 30 March business update, IAG’s reported margin guidance excludes an unrealised loss from a widening of credit spreads since 31 December 2019, which at the end of March approximated $100 million pre-tax.
