Jungfraubahn Holding AG must therefore assume that the results for 2020 will fall significantly below those of previous years. Compared with the situation one month ago, the outlook has become considerably worse. Any swift improvement to the prospects of the tourism sector in the immediate future is not expected. After the decision made by the Federal Council on 16 April 2020, there continues to be no timetable for an exit from the lockdown for the sector.
Since the closure of all tourism facilities Jungfrau Railways have been drawing partial unemployment benefit for around two thirds of their workforce. Consequently, on Monday the Board of Directors reversed their decision from the end of March, to pay a moderate dividend which would have been the same as the year before, slightly below the defined target range.
The Board of Directors has since proposed to the General Meeting of the Jungfrau Railway Group that a dividend not be paid out for 2019. In so doing, the business is focusing on the medium-term future and the completion of the V-Cableway. This will generate value for the region during construction in addition to optimal conditions for rebuilding the tourism sector after the crisis has ended. The salaries of the Executive Board will be significantly lower in 2020, due, among other reasons, to the variable components of the salary package being cancelled. In addition, the Board of Directors has chosen to take a collective salary cut.
As a value stock, the Jungfrau Railway Group is well equipped to deal with these difficult times and to continue building the V-Cableway, thanks to a solid balance sheet with retained earnings of around CHF 595, which are the result of a cautious dividend policy in previous years and a current lack of interest-bearing debt. Nevertheless, this year will also be particularly tough for Jungfrau Railways and it appears likely that – in order to finish the V-Cableway – for the first time in a long time the Group will need to borrow.
The Jungfrau Railway Group’s General Meeting will be held in Interlaken on 18 May 2020. It will take place with no physical participation by shareholders whatsoever. Shareholders will be informed about the format of the General Meeting and the voting procedure by personal invitation and publication in accordance with the Articles of Association.