Oil giant Tullow has announced it will not be paying its shareholders dividends.
According to Tullow, it took the decision following current financial constraints it is facing.
Tullow which is listed on three stock exchanges including the Ghana Stock Exchange, in its 2016 financial report recorded a drop in its profits as compared to the previous year 2015.
Tullow’s profits declined by eight percent between 2015 and 2016.
The figure dropped from 591 million dollars to 546 million dollars between the one year period.
Consequently, the oil giant recorded a loss after tax of about 600 million dollars at the end of 2016.
Though Tullow admits that its operations in Ghana provided a positive cash flow, it has cut down its 2017 projection from Ghana’s Jubilee oilfields from 73,700 barrels of oil per day to 68, 500 barrels of oil per day.
The review has largely been influenced by the works to be carried out on the faulty turret bearing on the FPSO Kwame Nkrumah which will lead to a twelve week shut down of the vessel, in the second half of 2017.
Tullow’s board in its 2016 financial report recommended that no dividend is paid to shareholerds and rather the money is invested back into the company.
It stated that “ At a time when Tullow is focusing on capital allocation, financial flexibility and cost reductions, the Board believes that Tullow and its shareholders are better served by retaining funds in the business”.
Tullow’s share price as at 10 : 48 GMT on Tuesday 14th February, 2017 on the Ghana Stock Exchange, was at 24cedis 83 pesewas.
By: Vivian Kai Lokko/citibusinessnews.com/Ghana