Fiat Chrysler Automobiles is on the verge of paying a regular dividend for the first time and said it is planning a roughly 1 billion euros ($1.1 billion) initial distribution to shareholders.
The Italian-American carmaker’s board will recommend a dividend of 0.65 euro per common share, according to a company statement. Shareholders will vote on the proposal at Fiat Chrysler’s annual meeting scheduled for April 12.
The follow-through on the dividend may be a welcome development for investors, who have been disappointed by Fiat Chrysler’s earnings under CEO Mike Manley. He took over in July from an ailing Sergio Marchionne and has been struggling with issues left over from his predecessor’s reign, plus new challenges that have emerged on his watch.
Higher-than expected costs have dragged on North American results, and Fiat Chrysler issued a 2019 profit projection that trailed analysts’ estimates. China’s auto market has weakened substantially, and Manley said earlier this month he was open to collaborating with other carmakers in Europe to try to rescue falling sales and shrinking margins.
Fiat Chrysler announced in October it would pay an extraordinary dividend of 2 billion euros linked to the sale of its auto-parts unit Magneti Marelli to to KKR & Co.’s Calsonic Kansei.