Oilfield services provider Halliburton has decided to cut its dividend amid uncertainties related to the duration of the market downturn.
Halliburton said on Wednesday that its board of directors had declared a 2020 second-quarter dividend of four and one-half cents ($0.045) a share on the company’s common stock payable on 24 June 2020, to shareholders of record at the close of business on 3 June 2020.
The decision to set the quarterly dividend at a lower level reflects the current market conditions and uncertainties regarding the depth and duration of this downturn, Halliburton explained.
Halliburton’s board of directors has also approved a 20 per cent voluntary reduction to their annual retainer. The board’s action follows salary reductions already taken by the members of the executive committee.
President and Chief Executive Officer of Halliburton, Jeff Miller, commented that: “Halliburton continues to take measures to strengthen our liquidity and financial resilience under the current circumstances. We implemented a $1 billion action plan to reduce overhead and other costs, lowered capital expenditures roughly 50 per cent from 2019 levels and accelerated the implementation of our North American service delivery improvement strategy”.
Miller continued: “Today’s dividend announcement reflects our commitment in the near term to deliver shareholder returns while maintaining a strong liquidity position. The dividend supports our shareholder value proposition by maintaining a reasonable payout as we navigate these uncertain times.
“More importantly, it places the company in a strong position, financially and structurally, to take advantage of the market’s eventual recovery”.
As previously reported, Halliburton has decreased its workforce by around 5,000 since the oil price collapse.
Halliburton started the year with 55,000 employees across the world, but the workforce has now shrunk to about 50,000 people, according to a filing with the U.S. Securities and Exchange Commission from April 24.