PARIS (1) – Orange (ORAN.PA), France’s greatest telecoms operator, mentioned on Friday it could cut its dividend for the 2019 monetary 12 months by 30% and that it could evaluation dividend coverage for the 2020-2023 interval within the wake of the coronavirus outbreak.

The emblem of French telecoms operator Orange is pictured on a closed retail retailer in Paris, France, April 17, 2020. REUTERS/Charles Platiau

State-controlled Orange’s transfer goals to defend the corporate’s steadiness sheet when buyers are wanting intently at firms’ money sources because the world financial system is going through recession.

It additionally comes amid heightened political strain, with calls from the French authorities to restrict or cancel dividend funds, particularly firms that profit from some state-supported schemes.

Orange now plans to pay 0.50 euro per share for 2019, a 20 euro cents lower in contrast to the beforehand anticipated fee of 0.70 euro per share.

The Paris-based group had additionally beforehand mentioned it could pay at the least the identical quantity over the 2020-2023 interval.

This represents a complete discount of 530 million euros ($576 million) in dividends for 2019, bringing the entire fee for that 12 months to 1.33 billion, Chief Monetary Officer Ramon Fernandez informed reporters on a name.

“Based mostly on at the moment out there data , Orange doesn’t count on a big deviation from its 2020 goals, however we’re intently monitoring the state of affairs and its developments,” Orange’s Chief Government Stephane Richard mentioned in written feedback.

Orange mentioned earlier this 12 months that it deliberate to have “flat optimistic” core working revenue for the 2020 monetary 12 months, in addition to an natural money movement of greater than 2.three billion euros for its telecom actions.

French firms that make use of state monetary help to see them via the coronavirus disaster should scrap dividend funds to their shareholders, the federal government mentioned final month.

“Should you shouldn’t have the money to pay tax or social safety costs, then you definitely additionally don’t have money to pay your shareholders, so don’t pay a dividend,” French Finance Minister Bruno Le Maire mentioned on the time.

Reporting by Mathieu Rosemain; Modifying by Sudip Kar-Gupta and Jane Merriman