Amsterdam, 27 March 2020
Brunel International, an international service provider specialising in the flexible deployment of knowledge and capacity in the fields of Engineering, Oil & Gas, Aerospace, Automotive, Life Science, ICT, Finance, Legal and Insurance & Banking, today provides an update on its current business in light of the impact of the Coronavirus (COVID-19) outbreak and recent volatility in the markets.
Jilko Andringa, CEO of Brunel International N.V.: “As an international company with presence in China, we were already confronted with the Coronavirus two months ago. We immediately started working fully remotely in Asia, and our team has done an incredible job to keep everybody safe, while continuing to run projects for our clients. We tailored our business continuity plan to these difficult circumstances and included the learnings from our experience in Asia to respond swiftly to the continuous changes in policies and market conditions.
Our main priority is the health and safety of our Brunel colleagues, and we strictly follow the guidelines of all relevant health authorities. At the same time, we work hard to safeguard the continuity of the services we provide to our clients. In all affected areas, our people are working from home wherever possible. I am touched by the drive, creativity and collaboration our colleagues show in the way they manage their job in this new and tough reality.
While we remain in a strong position due to our resilient operations and our strong financial position, we have taken the prudent decision not to pay out 2019 dividends. With this, we are able to support organic growth opportunities we still see in our markets. We feel supported by our founder and majority shareholder, who recently increased his share in Brunel to more than 60%, demonstrating his confidence in the strength and strategy of Brunel.”
Financial impact
To date, no material adverse impact on revenues has been observed from COVID-19, nor on cash. However, we see the activity level decreasing slowly. Based on the most recent predictions on economic growth, or the lack thereof, we anticipate a lower level of activities for the remainder of 2020. Due to the nature of our business and contracts, we anticipate that the DACH region and The Netherlands will be affected within the next couple of weeks, affecting our Q2 results. In the other regions, we are more exposed to ongoing large projects. The current conditions and the low oil price will cause delays or cancellations of projects. As a consequence, most of the other regions are likely to be impacted in the course of this year due to the lack of new large projects. The overall impact will depend on how fast COVID-19 can be controlled, and how soon economies can start recovering.
Brunel’s financial position remains strong and we have sufficient cash and borrowing base to deal with these circumstances in a healthy manner. In times of declining activities, our cashflow is supported by the release of working capital.
Dividend
Capital preservation is one of our key priorities at the moment, as it is impossible to predict the length and depth of the situation. Notwithstanding the fact that Brunel currently has sufficient liquidity to pay its dividend, given the lack of visibility over the likely duration of the pandemic and the volatility in the markets, we have decided to take a prudent approach and cancel the proposed dividend for the financial year 2019. If the situation normalizes in the second half of the year, and our cash position remains sufficient, we will consider to pay the dividend of EUR 0.30 per share as a special dividend in the second half of the year.
Brunel will publish its Q1 2020 results on 30 April 2020.
Attachment
