|FOR IMMEDIATE RELEASE||5 May 2003|
Cathay Pacific Airways' Board of Directors met today and has announced a change to its previously recommended 2002 final dividend in view of substantial losses now being suffered by the company as a result of the SARS outbreak.
The Board resolved that the recommended final dividend in respect of the year ended 31 December 2002 should be HK$0.28 per share, rather than the HK$0.56 per share previously recommended. The reduced dividend will cost HK$934m and this will save HK$934m as compared to the previously recommended dividend of HK$1,868m.
Shareholders will meet at the Annual General Meeting on 14 May 2003 to vote on the Board's latest recommendation.
The company made satisfactory profits for the first quarter of 2003 but passenger traffic declined sharply from late March onwards and the number of passengers currently being carried per day is at about 25 percent of the levels for the comparable period last year.
The company plans to operate only about 55 percent of the passenger flights originally scheduled for May and June. The cargo business so far remains largely unaffected.
Today's meeting follows a formal profit warning issued by the company on 11 April 2003. Although the Cathay Pacific Group had liquid funds it is important that it conserves cash.
Cathay Pacific Finance Director, Robert Atkinson said: "Clearly our passenger business has been badly affected by the impact of SARS, and will take some considerable time to recover. Our priority, therefore, is to minimize expenditures and conserve cash reserves, with the reduced final dividend recommendation being one such measure."
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