Oi SA, the worst-performing telecommunications service provider in Latin America this year, rose to an eight-week high after the company’s board approved a 500 million-real ($227 million) dividend payout.
The company’s non-voting shares gained 3.9 percent to 4.78 reais at 1:06 p.m. in Sao Paulo. A close at that level would be the highest since July 26. It was the biggest gain on the Ibovespa (IBOV) stock benchmark, which rose 0.2 percent.
Oi, which has tumbled 42 percent this year amid concern it will reduce dividend payments that are the highest in the phone industry, will pay out 30 centavos per share on Oct. 11 to stockholders of record as of Sept. 27, according to a regulatory filing after the market closed yesterday. Based on analyst estimates compiled by Bloomberg, the company’s projected dividend yield is more than 13, compared with an average of 5.4 for the world’s 100 biggest telecommunications carriers.
“This company has been in so much trouble lately, investors even thought it could simply cancel dividend payments,” Pedro Galdi, the chief analyst at brokerage firm SLW, said in a phone interview from Sao Paulo. “This amount means a return of almost 9 percent considering yesterday’s price, so it’s positive given the huge decline the shares suffered this year.”
Oi’s drop in 2013 compares with a 9 percent decline in the Ibovespa. The company posted a surprise adjusted net loss of 124 million reais in the second quarter.
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