Nokian cutting dividend to shareholders due to Ukraine war

NOKIA, Finland—The ongoing war in Ukraine and its impact on business has pushed Nokian Tyres P.L.C. to reduce the amount of the fiscal 2021 dividend it will pay shareholders to less than half of what it originally had proposed.

The Finnish tire maker said the fiscal 2021 dividend proposal it plans to present at its annual meeting on April 28 is a one-time fee of 55 Euro cents per share, for a total of nearly $85 million, based on the number of outstanding shares of Nokian Tyres at the time of the proposal.

See our full and ongoing coverage of impacts from the war in Ukraine.

On Feb. 8 of this year, Nokian's board of directors proposed that amount to be 1.32 Euro per share, payable in two installments.

According to the financial statements for the fiscal year 2021, the distributable funds totaled $828 million.

The proposed dividend corresponds to the minority dividend pursuant to Chapter 13, Section 7 of the Finnish Companies Act, or 8 percent of shareholders' equity, Nokian said.

In a statement issued on its website, the company said the war "has caused high uncertainty related to Nokian Tyres P.L.C's operational environment and manufacturing capacity."

As a result, Nokian said it is expediting previously announced plans to invest in new production capacity in Europe, while continuing to increase capacity at its North American plant in Dayton, Tenn.

The company previously announced it was continuing to operate its tire plant near St. Petersburg, Russia, in an effort to address Russia's threat of taking over any foreign plants that shut down because of the war.

Nokian's 1,600-employee plant in Vsevolozhsk, Russia, has capacity to produce 17 million units per year of radial passenger car and light truck tires. The company did not say how much the facility's capacity has been impacted since Russia's attack on Ukraine, nor did it say what its current staffing levels are.