British Airways owner to make first dividend payment since pandemic

By Pierre Bertrand

IAG says operating profit before exceptional items fell in the second quarter

Shares in International Consolidated Airlines Group rose after the British Airways owner said it would pay its first dividend since the pandemic and reported earnings that beat analysts' expectations.

At 0702 GMT shares (UK:IAG) traded 2.75% higher to 164.40 pence, leading the FTSE 100 UK:UKX.

The aviation group-also known as IAG, whose carriers include Iberia and Vueling among others-said it would pay an interim dividend of 3 European cents ($0.03) a share. It is the company's first payout since it suspended dividends in April 2020 during the pandemic.

IAG said it would look to pay a regular dividend and to return any excess capital to shareholders going forward.

"We think the reinstatement of the dividend indicates confidence in the prospects of the business," RBC Capital Markets analyst Ruairi Cullinane said in a research note.

The dividend comes off the back a strong set of results for IAG, Cullinane said.

Operating profit before exceptional items-IAG's preferred metric-came to EUR1.24 billion in the three months to the end of June, down 0.8% compared with the same period last year as costs rose faster than revenue mainly due to fuel expenses and wages. The result exceeded analysts' estimates of EUR1.08 billion.

IAG reported a 2.2% fall in second-quarter pretax profit to EUR1.13 billion on revenue that grew 7.8% to nearly EUR8.30 billion.

Write to Pierre Bertrand at pierre.bertrand@wsj.com

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08-02-24 0430ET

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