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R/€ = 19.98 Change: -0.26
R/$ = 18.22 Change: -0.37
Au 1592.50 $/oz Change: -22.81
Pt 718.80 $/oz Change: -6.58
 
 
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Sandvik to cut costs due to coronavirus impact, reduces dividend

26th March 2020 BY: Reuters

STOCKHOLM – Swedish mining gear and metal-cutting tools maker Sandvik on Thursday launched large cost-cutting measures in response to the rapid global spread of the coronavirus and said it would reduce its proposed dividend for 2019.

While the company, a rival of Sweden's Epiroc and US group Kennametal, expects a limited direct impact from the outbreak on first-quarter results, it said effects seen ahead required it to review costs both short and long term.

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"The coronavirus situation has escalated around the world and we have to adapt to this dramatic change in global business conditions, Sandvik CEO Stefan Widing said in a statement.

The company said temporary short-term actions primarily related to reduced working hours was seen generating savings of about 1.5-billion crowns ($148-million) this year, adding group management would also cut their salaries by 10% while the short-term work schemes are in place.

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Long-term structural measures were at the same time seen creating savings of about 900-million crowns, with the full annual run-rate by the end of 2021.

It said the measures would lead to 1.4-billion in one-off expenses in the second quarter.

Sandvik's board said it now proposed a 2019 dividend of three crowns a share versus the previous proposal of 4.50 crowns. 

EDITED BY: Reuters
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