Hungarian telecommunications firm Matav proposed on Tuesday a dividend of 70 forints ($0.375) per share on 2004 earnings, unchanged on a year earlier and below the market's expectation.
Matav, a subsidiary of Germany's Deutsche Telekom , said it kept the dividend unchanged in order to maintain its debt level in line with its long-term targets and to preserve resources to complete the recent acquisition of Montenegro's Telekom Crne Gore.
Investors had been looking for a dividend of around 79 forints per share, according to a Reuters poll of analysts earlier this year.
"There shouldn't be too much disappointment, the firm has given quite clear indication recently they don't want to go outside of their (debt) guidance too much, " said CA IB analyst Anna Bossong, who had forecast a dividend of 75 forints per share.
Matav is targeting a net debt to net debt plus equity plus minority interest level of between 30 percent and 40 percent and with the Montenegrin acquisition and the dividend, analysts expect it to exceed that range in the first half of 2005.
"But this will be a problem only in the first few quarters, then by the second half, they'll be comfortably back in the range. This is a good compromise," Bossong added.
Matav's net debt to net debt plus equity plus minority interest ratio was 32.9 percent at the end of 2004, before it began paying for its 165 million euro deal for Crne Gore.
"The level of subsequent dividends will be dependent on the acquisition opportunities that may arise, on the future financial position of the group and on general market conditions," it said.
The dividend will need to be approved at its April 27 general meeting.
Source: Reuters
23.03.2005