Suncorp May Cut Dividends To Save Cash

The Age

Thursday October 30, 2008

DANNY JOHN

HARD-PRESSED shareholders in Suncorp-Metway could see their next full-year dividend cut by a fifth following the group's warning that it may target the payout to conserve cash on its balance sheet.

Industry analysts calculated yesterday that the 2009 total return to investors might be reduced by as much as 22 a share to 85 from the $1.07 declared for the year to the end of June.

Such a cut would save the company about $220 million and ease the pressure on its profits to fund the dividend at current levels.

An almost 50% collapse in net earnings this year caused by storm-related claims in its insurance division led Suncorp-Metway to dip into its reserves to cover its total payout. The $1.07 dividend eats up $1.084 billion a year. Suncorp-Metway promised to hold its dividend into next year just two months ago.

Its shares rose 15 to $7.65. -- DANNY JOHN

© 2008 The Age

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