Vulcan Steel Announces NZD 0.0259 Dividend with 100% Franking Credits

Dividend Announcement Overview

Vulcan Steel Limited (ASX: VSL) has confirmed a fully franked ordinary dividend of NZD 0.02588235 per share for the six-month period ending 31 December 2024. The announcement, made on 11 February 2025, sets the ex-dividend date at 13 March 2025 and the record date at 14 March 2025, with payments scheduled for 27 March 2025.

This dividend reflects Vulcan Steel’s ongoing commitment to returning value to shareholders amid a stable operating environment. The dividend is fully franked at a 30% corporate tax rate, providing shareholders with imputation credits that reduce the effective tax burden on their dividend income.

Details on Franking and Supplementary Dividend

The ordinary dividend is fully franked, with an imputation credit rate of NZD 0.00194444 per share, representing 20% imputed credits. Additionally, a supplementary dividend of NZD 0.00088235 per share is payable to Australian-domiciled shareholders to offset non-resident withholding tax obligations in New Zealand. This supplementary dividend is also fully franked, ensuring equitable treatment across jurisdictions.

New Zealand shareholders face a nominal resident withholding tax of NZD 0.00695 per share, while Australian shareholders benefit from the double tax treaty between New Zealand and Australia, which caps withholding tax at 15%. Vulcan Steel has confirmed no external approvals or court orders are required for this dividend distribution, streamlining the payment process.

Currency and Market Implications

The dividend is declared in New Zealand dollars, with an Australian dollar equivalent of AUD 0.02342353 per share based on the current exchange rate of approximately AUD 1.00 to NZD 1.10497. Investors should be mindful of potential currency fluctuations impacting the AUD value of their dividends.

This dividend announcement signals Vulcan Steel’s solid financial footing and consistent cash flow generation, which is particularly notable in the cyclical steel manufacturing sector. The fully franked nature of the dividend may enhance its attractiveness to income-focused investors seeking tax-efficient returns.

Looking Ahead

While the dividend payout is modest, it underscores Vulcan Steel’s prudent capital management and shareholder alignment. Market participants will be watching closely for the company’s upcoming operational updates and any shifts in commodity pricing that could influence future dividend capacity.