BASF shares fall after proposal to cut dividends for the next four years By Investing.com

Investing.com — BASF ( ETR: ) shares fell on Thursday after it announced a dividend cut, proposing a minimum annual payment of €2.25 per share for the 2024 business year, payable in 2025.

At 4:22 am (0822 GMT), BASF was trading 2.9 percent lower at €44.035.

This marks a decrease from the €3.40 per share distributed in 2023. The revised dividend policy is part of BASF’s broader corporate strategy to balance shareholder returns with long-term financial goals.

“In this way, BASF aims to distribute at least 12 billion euros to shareholders from 2025 to 2028,” the company said in a statement.

This includes €8 billion in dividends over the four-year period and €4 billion in share buybacks, scheduled to start by 2027 at the latest.

The proposed dividend of €2.25 per share equates to around €2 billion annually. This approach provides financial flexibility as the company focuses on long-term growth and profitability.

BASF expects EBITDA before special items of EUR 10 billion to EUR 12 billion by 2028 in mid-cycle or upcycle conditions.

The company also expects cumulative free cash flow to exceed €12 billion for the period 2025-2028. By 2028, return on capital employed will reach 10%.

In addition, the company expects a cash flow of approximately €2 billion in 2024 from its exit from the oil and gas sector, further supporting its financial targets.

BASF also plans to reduce capital expenditure below depreciation starting in 2026 after the Zhanjiang Verbund site in China comes online in 2025.