STOCKHOLM – Swedish mining gear and metal-cutting tools maker Sandvik on Thursday launched large cost-cutting measures in response to the rapid global spread of the coronavirus and said it would reduce its proposed dividend for 2019.
While the company, a rival of Sweden's Epiroc and US group Kennametal, expects a limited direct impact from the outbreak on first-quarter results, it said effects seen ahead required it to review costs both short and long term.
"The coronavirus situation has escalated around the world and we have to adapt to this dramatic change in global business conditions, Sandvik CEO Stefan Widing said in a statement.
The company said temporary short-term actions primarily related to reduced working hours was seen generating savings of about 1.5-billion crowns ($148-million) this year, adding group management would also cut their salaries by 10% while the short-term work schemes are in place.
Long-term structural measures were at the same time seen creating savings of about 900-million crowns, with the full annual run-rate by the end of 2021.
It said the measures would lead to 1.4-billion in one-off expenses in the second quarter.
Sandvik's board said it now proposed a 2019 dividend of three crowns a share versus the previous proposal of 4.50 crowns.