Telekom Austria Slashes Dividend on Weak Financial Outlook
Published on: 24th Sep 2012
Note -- this news article is more than a year old.
By: Ian Mansfield
Telekom Austria Group has slashed its shareholders dividend from EUR 0.38 to EUR 0.05 per share for the year 2012 and set the planned dividend for the year 2013 at the same level of EUR 0.05 per share
The company said that this is a result of the expectation that the intensification of the competition in Austria will continue in 2013. Together with adverse macro-economic conditions in central and eastern Europe, as well as regulatory pressure going forward, this is anticipated to have a material impact on the financial results and the cash flow generation in 2013.
At the same time, the postponement of the spectrum auction in Austria to 2013 will amplify cash requirements in the coming year.
In this competitive environment maintaining financial flexibility is of overriding importance to the management of Telekom Austria Group. Retaining leverage within the target corridor of 2.0x - 2.5x Net debt/EBITDA comparable and protecting the BBB (stable) investment grade rating is central to Telekom Austria Group's cash use policy.
Simultaneously, the management of Telekom Austria Group has initiated further measures to minimise the negative effects of the above mentioned factors on the Group's Operating Free Cash Flow.
Telekom Austria Group confirmed its financial outlook for the year 2012.