Tuesday May 17, 2011
Analysts say it is not likely to be higher than RM1.63 sen per share
PETALING JAYA: DiGi.Com Bhd has yet to determine the quantum of dividend payment to its shareholders this year as this would depend on its capital management activities.
It had hoped to raise its dividend payout ratio this year in order to maintain shareholder value.
DiGi's dividend policy change is in preparation for lower earnings stemming from efforts to improve its network.
Company officials have explained that as DiGi continued to modernise its network, the depreciation of its equipment would be to the tune of RM1bil over three years.
This would have an impact on its profits and hence the need to adjust its dividend policy if DiGi intended to maintain the level of its dividend payments.
The lower profits stemming from the depreciation will not have an impact on DiGi's cash flows or dividend paying ability.
However, analysts said that the actual dividends to be paid to shareholders were not likely to be higher than last year's RM1.63 sen per share.
DiGi is a pure dividend play and currently has a dividend payout policy of 80%.
In financial year ended Dec 31, 2010 DiGi paid out 107% of its profits as dividends while in the fiscal year before that, it distributed a higher 138% of profits as dividends to its shareholders.
DiGi posted a net profit of RM331.4mil for the first quarter ended March 31, which was 19% higher than RM278.3mil in the same period last year on higher revenue.
Its revenue stood at RM1.43bil, an increase of 11% compared with RM1.29bil a year ago.
The board of directors recently declared a first interim tax exempt (single-tier) dividend of 43 sen per ordinary share in respect of the financial year ending Dec 31, 2011.
http://biz.thestar.com.my/news/story.asp?file=/2011/5/17/business/8695287&sec=business
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