Retirement homes operator Orpea suspends dividend in 2022
|Orpea is a former Dividend Growth stock with 10 consecutive years of increases through 2019.|
Orpea SA, the France based operator of retirement homes, will not pay a dividend this year in order to pay down debt. Orpea's stock price crashed in 2022 after accusations of mistreatment of elderly in its nursing homes.
It is the second time in three years that shareholders will not receive a dividend from Orpea, a former Dividend Aristocrat in Europe with 10 years of dividend growth through 2019.
2022 is not a good year for investors in Orpea, which is down more than 60% after accusations of not treating patients in nursing homes properly. This is still under investigation, also by the French government. Orpea cites the debt situation as a reason for retrocession of the dividend. Orpea says it is facing significant debt repayments and also mentions having signed an agreement with its banks for a secured syndicated loan of 1.73 billion euros. Orpea's net financial debt increased by 1.23 billion euros to reach 7.89 billion euros at the end of 2021. No dividend will be paid by Orpea to reduce these debts, which also wishes to mature for more of 3 billion euros in assets by the end of 2025.
Investors sold their Orpea shares massively this year. Previously, Orpea was known for its progressive dividend with an increase for 10 consecutive years until financial year 2019. Then it went wrong due to covid-19 and the dividend was cancelled. Last year, investors received a new dividend of €0.90 from Orpea, which decided on May 13 not to pay a dividend for 2021. As a result, investors will also not receive a dividend of Orpea in 2022 after 2020.
In a press release, Orpea speaks of an exceptional context, following which the Board of Directors has decided not to propose to the next General Meeting the payment of a dividend for the 2021 financial year. The competitor Korian will pay a dividend to its shareholders in 2022; in June the Korian dividend will be detached. Another European company not paying a dividend in 2021 is travel technology Group Amadeus IT from Spain.
Founded in 1989, ORPEA is one of the world's leading players in global dependency care, with a network of establishments in more than 20 countries, spread over 5 clusters: - France Benelux, Central Europe, Eastern Europe, Iberian Peninsula / Latam and Other country. ORPEA is listed on Euronext Paris (ISIN: FR0000184798) and a member of the SBF 120, STOXX 600 Europe, MSCI Small Cap Europe and CAC Mid 60 indices. Orpea canceled the dividend in 2020 due to COVID-19.