Telefonica cuts dividend target to focus on debt

Reuters

Telecoms operator Telefonica  trimmed its planned 2012 dividend on Wednesday in a move to keep its debt under control as the telecoms group battles sluggish economic growth in its home market and uncertainty in Europe. Spain's largest telecom company last month blamed a tough regulatory environment and challenging business conditions for a weak nine-month performance, but had promised to stick to its shareholder return targets.

It now says "significant changes" in financial markets and the economic and operating environment prompted the need to bring forward a more flexible remuneration scheme that had been initially planned for 2013. Telefonica (Madrid, Spain) said it would pay a total 2012 dividend of $1.94 per share, down from the $2.3 previously planned, and pledged to maintain that in 2013.

"We believe this policy is compelling and compatible with sustained investments and enhances our financial flexibility," Chief Financial Officer Angel Vila said on a conference call.

Spanish companies are struggling to obtain fresh funds in a long-running credit freeze. Credit ratings agency Standard and Poor's (New York) downgraded Telefonica in August as Spanish consumers opted for cheaper tariffs and rival agency Fitch followed suit in September.

The $1.94 dividend for 2012 will include $1.6 in cash and the remainder via a share buy-back plan.

Spain's biggest company by market capital held to its dividend of $2.08 for 2011 and said it planned to keep its debt ratio between 2.0 and 2.5 times operating income before depreciation and amortization (OIBDA).

Vila told investors the company continues to assess its asset portfolio but declined to give any details on potential disposals. He repeated the company's earnings guidance for 2011.

(Reporting by Tracy Rucinski; Editing by Martin Roberts and David Holmes)

ArticleTools

Featured Reports

Content Delivery Networks (CDN) 2015
Content Delivery Networks (CDN) represent large distributed system of servers deployed in multiple data centers across the Internet. CDNs provide solutions for efficiently and effectively managing content of all types. Solutions include core services such as aggregation, management, and distribution of content as well as a variety of value-added functionality.

 

Cable Carrier Wi-Fi: MSO Take MNO Market Share
How does a cable provider gain a bigger piece of the telecom market pie chart? With a clever Wi-Fi strategy, cable providers are in a unique position to dominate the residential and business telecommunications markets. This is the portent of things to come in the very near future: an MSO as MNO play.

 

Structured and Unstructured (Big) Data in Telecom Analytics
This report provides the reader with a broad understanding of telecom data (structured and unstructured/big data) and related analytics. The report identifies market drivers and opportunities as well as forecasts for certain key growth areas such as deep packet inspection.

 

Affordable Market Reports on Big Data, IoT, CDN & More!
Access the exclusive new series of market research reports brought to you through the partnership of Mind Commerce research and TelecomEngine.com.
Browse the latest titles

 

 

Featured Events & Partners

GEN 15
Nov. 16-19, 2015

Omni Hotel, Dallas, Texas

The global gathering of networking professionals enabling the future of agile, assured and orchestrated services powered by CE 2.0, LSO (Lifecycle Service Orchestration), SDN and NFV.

Visit event website...