(Bloomberg) -- Telekomunikacja Polska SA, Poland’s largest phone company, said lower profit won’t force a cut in dividend payouts, sending its shares up as it forecast sales will return to growth next year.
The France Telecom SA unit announced a 1.5 zloty a share payout from 2009 profit, unchanged from a year earlier even as net income for the period fell 41 percent to 1.28 billion zloty ($440 million), missing the 1.35 billion-zloty median estimate of 19 analysts surveyed by Bloomberg.
Warsaw-based Telekomunikacja plans to maintain the level of the payout in the “medium term” as it seeks to generate net free cash flow of at least 2 billion zloty a year through 2012, compared with 3.23 billion zloty last year, it said.
“With this kind of net free cash flow plan, the dividend declaration is supporting the shares, because the poor results are already discounted by the market,” Michal Marczak, an analyst at BRE Bank SA, said by phone.
Telekomunikacja shares rose as much as 2.9 percent to 15.82 zloty in Warsaw trading today, gaining the most in more than two weeks, and traded at 15.71 zloty at 11:17 a.m. The benchmark WIG20 Index lost 0.2 percent.
An agreement with the government last year will help Poland’s telecommunications market grow by raising investment and limiting cuts to regulated prices, the company said in a separate statement.
The market, which in 2009 shrank by 3.4 percent, will return to “close to zero” growth in 2011, with the company’s sales rising at a similar pace, Chief Executive Officer Maciej Witucki said on a conference call today. By 2012 Telekomunikacja aims to grow faster than the market as it increases investment.
Sales Decline
Sales this year will fall by a “high single-digit” percentage as last year’s cuts in the regulated prices that mobile-phone operators charge competitors continue to affect the market, the company said.
Telekomunikacja repeated that the drop will be slower than last year’s 8.8 percent decline to 16.6 billion zloty. Revenue at Telekomunikacja’s mobile unit fell 10 percent last year to 7.75 billion zloty.
Telekomunikacja is “a classic turnaround story, and the key question is whether management is able to execute such a turnaround,” Dalibor Vavruska, a London-based analyst at ING Bank NV, wrote in a note, adding that he planned to comment more after hearing from the company.
Broadband Investments
Telekomunikacja plans a “temporary” increase in investments in broadband Internet following an agreement last year with the telecommunications regulator. Total investment this year will rise to 16 percent to 18 percent of sales, compared with last year’s 13.3 percent, and may increase to 19 percent in 2012.
Under the deal with the watchdog, Telekomunikacja will build or upgrade 1.2 million broadband lines over three years, spending about 3 billion zloty. During that time the regulator won’t reduce the prices the company charges competitors for access to its network, known as “wholesale” rates.
The 2 billion-zloty net free cash flow target accounts for the Internet investments pledged to the regulator, without which the figure would be 1 billion zloty higher.
Under the deal the watchdog also suspended proceedings to split the operator into infrastructure and services divisions.
The Ebitda margin, or the ratio of earnings before interest, taxes, depreciation and amortization to sales, will increase by 2012 after shrinking this year by less than 10 percentage points, Telekomunikacja said in a separate regulatory statement today. The margin was 37.9 percent in 2009.
No comments:
Post a Comment