Engineering group Mincon suspends interim dividend

Irish engineering group Mincon said on Monday that trading in the second half of the year was so far in line with the first six months, but that Covid-19 related challenges remained. It has suspended its interim dividend for 2020.

The company, which specialises in the design, manufacture, sale and servicing of rock-drilling tools and associated products, said it had continued to broaden the business during the third quarter and had achieved “comparable growth” to the first half of the year.

Revenues increased by 12 per cent in the nine months to September 30th 2020, compared with the same period in 2019, with sales up in the construction sector, although the company said that some of this growth was achieved through the sale of non-Mincon manufactured product, with a corresponding lower gross margin.

Overall, Mincon said the environment in the mining sector was “positive” in light of the strong prices in precious metals and iron ore. However, the business remains challenged by the Covid-19 pandemic, due to the difficulties in shipping product, as the recovery from the initial shock of the pandemic evolves at various speeds in different regions. The company is no longer subject to Covid-19 restrictions, and its factories are fully operational.

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Looking ahead, given the uncertain trading environment, Mincon said it had decided to adopt a “prudent approach” by suspending the interim dividend for 2020.

“However, we will continue to assess our ongoing capital requirements and, in the absence of any significant adverse impact of the pandemic in our markets in the coming months, it is the board’s intention to increase the final dividend declared in respect of the financial year 2020 so that the final dividend will be in line with the total dividend paid for 2019,” the company said.