BultiesBrothers schreef op 16 februari 2022 20:38:
Thanks, Hassan. And the next question is this year you're returning significant dividends to the shareholders. What were the reasons to prefer paying dividends about starting a buyback program and are you considering a buyback program as a free cash flow allows that possibility in the future?
Hassan Badrawi
Well, there's two parts to this question. The first part is that, this is not a typical dividend.
We have sort of opted for a capital repayment process technically as a company, when we listed in Holland, we were able to establish a certain share premium reserve that we're able to tap into effect these capital reductions, which effectively extends these reductions or make these
reductions tax free in terms of withholding tax.
And this benefits is extended to - should be extended to all shareholders, of course, subject to any other personal sort of tax circumstances. In general, they are extendable to all shareholders and we believe that is a very efficient way of returning capital to shareholders. In terms of future buybacks, I think we've alluded in the last conference call that subject to achieving sort of our investment grade - future investment grade rating.
And we are in a good trajectory to achieving this goal we hope that we would then at that juncture potentially explore other avenues of returning capital shareholders. However, we do believe that this capital return or capital reduction, as it's called technically is quite an efficient way of returning capital to shareholders.
Ze gooien het op een soort van 'repayment of capital' ipv een dividend. Het verschil tussen die twee is: (Investopedia)
A capital dividend, also called a return of capital, is a payment that a company makes to its investors that is drawn from its paid-in-capital or shareholders' equity.
Regular dividends, by contrast, are paid from the company's earnings. A company generally will only pay a capital dividend when its earnings are insufficient to cover a required dividend payment, possibly indicating that a company is in trouble as its business operations are not generating a significant amount of earnings or any earnings at all.
KEY TAKEAWAYS
A capital dividend is a type of dividend that is drawn from a company's capital base, as opposed to its retained earnings.
Regular dividends are paid from earnings, representing a share of the profits, and are a sign of good financial health as the company has the ability to distribute additional earnings.
Capital dividends are often seen as a signal that a company lacks spare cash to pay dividends, indicating possible financial trouble.
Companies that pay dividends and that are struggling financially sometimes have the option of stopping dividends until their finances are back on track.
Capital dividends are not taxed as they are seen as a return of a portion of the money that investors paid when they bought shares.