Tecnotree's board proposes a dividend of one cent to the AGM

Translation: Original published in Finnish on 3/17/2025 at 7:15 am EET.

The dividend proposal did not come as a surprise, even though the company did not propose a dividend at the time of the financial statements. Last year was the first time in a long time that the company had paid a dividend, and we expected that the company would not want to deviate from this policy. Previously, we had forecast a dividend of two cents, which we have reduced to one cent for this comment.

Small dividend is mostly of signal value

The financial significance of the dividend for both investors and the company is very small. The one cent dividend represents a dividend yield of approximately 0.3% at the current share price. The absolute amount of dividends to be paid on outstanding shares is approximately 160 TEUR, so it will not have a significant impact on the company's financial position either (Q4'24 cash and cash equivalents 16.8 MEUR).

 The dividend payment is somewhat contradictory as the company's free cash flow in 2024 was still negative, although it improved from 2023 levels. According to the dividend policy set by the company in the fall of 2024, the company aims to pay 10% of the free cash flow as dividends annually. Thus, with a negative cash flow, the company's dividend policy would not require a dividend payment, and thus, in our view, the company's dividend payment is intended to signal its confidence in future cash flow improvements. For 2025, the company has set a free cash flow guidance of over 4 MEUR. The cash flow is indeed on the right track, although it is still significantly below the company's earnings figures.