Ratos Declines as Nordea Sees Lower Dividends: Stockholm Mover

Ratos AB (RATOB) fell for a second day in Stockholm trading after Nordea Bank AB said the company’s dividend will probably stay “structurally lower” for years after Ratos yesterday cuts its annual payout to shareholders.

The stock lost as much as 0.85 krona, or 1.3 percent, and was down 1.2 percent at 64.15 kronor as of 12:16 p.m. local time in Stockholm, adding to its 5.1 percent slump yesterday. The number of Ratos shares traded today represented 72 percent of the average three-month daily volume.

The investment company cut its dividend for 2012 to 3 kronor per share yesterday, from 5.5 kronor a year earlier, and said the future dividend “should reflect actual earnings development.” Nordea today cut its rating on Ratos to sell from hold and lowered its 12-month price estimate to 62 kronor from 69 kronor.

“Although we regard a lowered dividend policy as a prudent move on the back of soft cash flows, it alters the share’s DNA materially,” Catrin Jansson, an analyst at Nordea in Stockholm, said in a note to clients today. “The 45 percent year-on-year dividend cut is the first cut since 1991. Moreover, Ratos alters its dividend policy, with the main change that it is now subject to the earnings development, and so we believe it will stay structurally lower for many years.”

To contact the reporters on this story: Niklas Magnusson in Stockholm at nmagnusson1@bloomberg.net; Johan Carlstrom in Stockholm at jcarlstrom@bloomberg.net

To contact the editor responsible for this story: Toby Alder at talder@bloomberg.net

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