© Reuters. The 120 metres high Bayer Cross, logo of German pharmaceutical and chemical maker Bayer AG, consisting of 1710 LED glass bulbs is seen outside the industrial park “Chempark” of the chemical industry in Leverkusen, Germany, September 23, 2023. REUTERS/Wolf
FRANKFURT (Reuters) -German drugmaker Bayer (OTC:) said on Monday that it was amending its dividend policy to pay the legal minimum for a period of three years to reduce debt, in a decision it said it did not take lightly.
The company said it was facing high debt and interest rates, as well as a “challenging free cash flow situation”.
“One of our top priorities is reducing debt and increasing flexibility,” Chief Executive Bill Anderson said.
“Our amended dividend policy, which considered investor input and was not taken lightly, will help us do so.”
Bayer said it will propose a dividend of 0.11 euro for 2023. That compares with 2.40 euros a year earlier, and expectations for a dividend of 1.92 euros, according to a consensus published on its website.
Analysts at Jefferies said the move “highlights the extent of the challenges (both operational and financial) facing the business” and that “further major strategic actions are required to restore the balance sheet”.
In January, Bayer announced job cuts and in November it had said it was weighing options to break apart the maker of prescription drugs, consumer health products, crop chemicals and seeds, in a bid to revive a battered share price.
