United Internet AG (UTDI) may more than double its dividend to as much as 44 cents a share from 2013 earnings as investment in rolling out new products will no longer hold back profit, Chief Executive Officer Ralph Dommermuth said.
“If things work out as planned, our dividend should be between 25 cents and 44 cents next year,” Dommermuth said in an interview in Frankfurt today. “Of course we still need to look at what our investments are and how much cash we have.”
The proposed dividend for 2011 will be maintained at 20 cents, the CEO said. The company generally aims to pay 25 percent to 40 percent of earnings per share, he said, adding that EPS will probably be in a range of 1 euro to 1.10 euros next year after 80 cents to 90 cents in 2012.
United Internet, a German provider of phone and Internet services, will probably boost revenue by at least 15 percent next year after targeting about 15 percent in 2012, the CEO said in a press conference today. The loss from starting new business areas such as do-it-yourself homepages and the expansion into new countries will be lower in 2013 after marketing costs again limit earnings growth this year, he said.
At 15 percent growth a year, revenue in 2013 would be 2.77 billion euros, according to Bloomberg calculations. That exceeds an average analyst estimate of 2.37 billion euros in a Bloomberg survey.
Revenue rose 9.8 percent last year to 2.09 billion euros, the Montabaur-based company said in a statement late yesterday. The 2012 sales target, which would amount to about 2.4 billion euros, compares with an average analyst estimate of 2.24 billion euros in a Bloomberg survey.
The company is expanding its offering of applications such as homepages, e-shops and to-do lists to more markets, including Italy. The company also offers access services such as mobile and broadband connections.
Earnings before interest, taxes, depreciation and amortization rose 2 percent to 364.8 million euros as profit was held back by smartphone subsidies to win customers, product development expenses and spending to add business abroad, United Internet said.
United Internet fell 0.4 percent to 13.99 euros as of 3:55 p.m. in Frankfurt trading.
Investments in new markets last year totaled 61.1 million euros, and United Internet said it expects to spend an additional 86 million euros to 124 million euros this year on expansion.
The CEO, who owns about 42 percent of United Internet’s shares, according to data compiled by Bloomberg, said the company may buy back additional shares this year. A delisting is not on the table, he said.
“From what I know, here and now, that’s not my goal and I feel at ease having the company listed,” he said. “If we were to delist, I wouldn’t have the variety of options” including issuing new shares and buying them back at opportune moments.
To contact the reporter on this story: Cornelius Rahn in Frankfurt at email@example.com