When it resumed paying dividends to shareholders in April 2022, after nearly a decade without a dividend, the Taurus arms manufacturer (TASA4; TASA3) planned to review its dividend policy later this year and begin to distribute it quarterly. However, the change should continue until 2023.
In an exclusive interview with InfomoneySalesio Nuhs, CEO of Taurus, stated that the next payment of dividends by the company should only take place in April 2023, referring to the results of 2022. That is, nothing will fall into the pockets of investors on the third or fourth. quarter this year.
The company released its results for the second quarter of 2022 this Tuesday (9), where it recorded a net income of 100.8 million Brazilian riyals in the period, which is 47.9% lower than the same quarter of 2021. The real advanced against the dollar.
As an issuer, Taurus benefits from a stronger dollar. But in the second quarter of this year, the US currency averaged 4.93 Brazilian real, or 6.8% lower than the 5.29 Brazilian real recorded in the same period last year.
Noah’s justification for leaving out the possibility of a quarterly dividend for 2023 is the fact that the company is reconfiguring its balance sheet earnings reserves, as required by regulations. According to him, as of April 2023, the idea of starting a quarterly bonus to shareholders, with intermediate or interim dividends, prevails.
The difference between the two types of dividends is that brokers need to be approved at a shareholder meeting, while interim dividends can be paid beforehand.
According to the CEO, Taurus’ dividend policy should continue to provide a bonus of at least 35% of adjusted net income. Noah said the dividend reserve should also include a stock buyback plan and eventual bonuses.
Nuhs states that Taurus currently has a cash position of R$263 million. Adjusted net income, which is used as the basis for the dividend, amounted to R$255 million during the first half of this year. However, technically, without the reserve formed on the balance sheet, dividends cannot be paid.
Noah confirmed: “We will form reserves to pay the dividends in April of next year, in connection with the results of 2022, and start distributing quarterly dividends in 2023.” “It is important for investors to understand that if the company decides to build these reserves, it is because strategic planning includes this possibility of payment,” he added.
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Resume dividends for Taurus
Total dividends distributed by Taurus in April, for the year 2021, were R$194 million, or R$1.62 per share. The company had to use part of the profits of R$635 million earned last year to absorb losses from previous years.
Taurus had accumulated losses of R$740.7 million. To absorb it, it reduced the capital, which occurred in 2021. The negative account decreased to 333.7 million Brazilian reals at that time. To recalculate, this amount was deducted from the 2021 profit.
Under its articles of association, the company was only obligated to pay about R$ 68 million (0.58 R$ per share). For this year, Taurus no longer has any losses that reach zero.
He also reinforced the slogan representing the new path of Taurus: “We are a strong cash-generating company.”
Prospects for the second half of 2022
For the second half of this year, Noah believes in the potential for the dollar to rise more than in the first, which should maximize Taurus’ results. According to the CEO, the focus is on tracking operational profitability.
He stressed that Brazil is affected by the US influence on the elections. This is because, historically, according to Nuhs, there is a rush to buy guns in election years in the United States, as consumers consider tightening potential legislation on equipment access in democratic governments.
Nohs notes that a similar effect is already occurring in Brazil, with a 47% growth in the arms market compared to the same period in 2021. “The closer the elections, the more cheerful the market,” he said. He points out that any change in legislation requires a referendum.
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