Portugal Telecom Shares Decline on Dividend Cut: Lisbon MoverAnabela Reis
Portugal Telecom SGPS SA, the country’s biggest telecommunications company, fell the most in three months after cutting its dividend for 2013 and 2014.
The payout will be 10 euro cents a share each year, down from 32.5 cents for fiscal 2012 earnings. The stock dropped 7.3 percent to 2.93 euros in Lisbon, the biggest fall since May 14.
Oi SA, Brazil’s largest landline phone company, in July canceled a dividend payment of 1 billion reais ($432 million) after exceeding a self-imposed limit for indebtedness. Portugal Telecom owns 12.1 percent of the investor group known as TmarPart that controls Oi, and 19.4 percent of the Brazilian carrier’s non-voting shares, according to Oi’s annual report.
Portugal Telecom’s “dividend cut is a reflection of the continued investment required by Oi to turn around its structurally challenged business in Brazil,” Robin Bienenstock, an analyst at Sanford C. Bernstein Ltd., wrote in a note today.
Zeinal Bava joined Oi as chief executive officer In June, leaving the same post at Portugal Telecom to replace CEO Francisco Valim, who was ousted in January.