Jim Ratcliffe’s chemicals company Ineos has cancelled its annual dividend in the wake of a growing and costly debt pile.
While Ineos is a private company and therefore has no barriers to cancelling or altering its dividend policy, it’s still representative of a notable swing from last year’s profits before tax of more than €407m (£340m) to a €71m (£59m) loss this year.
Ineos had paid out annual dividends for more than ten years, with the exception of 2020, hitting more than €2bn in payouts in 2019.
However, with the business coming under increasing cost pressures, the debt pile had risen to more than €10bn (£8.4bn) by the end of 2024, leading Ratcliffe and his fellow shareholders to opt to effectively reinvest the dividend back into the company to facilitate paying the cost of holding that debt.
The Times reports that the net finance costs had risen by the end of last year to €1.11bn (£920m), leaving the total debt standing at €10.6bn (£8.9bn).
Ratcliffe recently wrote an open letter to EU politicians citing the “idiotic” plans to deindustrialise the continent, noting that high energy bills and other factors were set to cost jobs as well as regional security.
“Decarbonising Europe by deindustrialisation is idiotic. We lose jobs and security and the CO₂ simply floats back over Europe anyway,” Mr Ratcliffe wrote in his open letter to political leaders recently.
“Government policies have resulted in enormously high energy prices and crippling carbon tax bills. The industry is in crisis with such huge disadvantages. Instead of investing in growth for the future, it is fighting for survival. Government policies will shut all petrochemicals in Europe. All our major competitors are planning for withdrawal from Europe as government has failed to act time after time.
“The consequence of this policy is that Europe will import all its raw materials from the USA and China, who will benefit enormously.”
On not paying out the dividend this year, a spokesperson for Ineos said: “As a private company, our shareholders make strategic decisions, including the payment of dividends, the size of which may change from time to time, depending on the performance of the business.
“One of the strengths of Ineos is that we are not obliged to pay dividends when cash is better invested in the business. This is an example of our discipline and prudent financial management. In 2024, our three shareholders decided to reinvest the dividend back into the business.”
Along with Jim Ratcliffe, Andrew Currie and John Reece are the principle shareholders at Ineos through its ultimate ownership structure, with the former holding in excess of 60 per cent of the holding as of 2023.
