Netia Keeps Plan for First Dividend in 8 Years After 2013 Profit

Netia SA, Poland’s second-largest fixed-phone company, kept a plan to pay its first dividend in eight years after posting profit for a fourth straight quarter.

Netia proposed to pay 146 million zloty ($48 million) as a dividend, or 0.42 zloty a share, the Warsaw-based company said in a regulatory filing today. Net income was 10.5 million zloty in the fourth quarter, compared with a 108.9 million-zloty loss a year earlier and the 9.7 million-zloty mean estimate of eight analysts in a Bloomberg survey. Netia also said Chief Executive Officer Miroslaw Godlewski plans to resign by Aug. 31 after holding the post for seven years.

“The dividend is a key factor for the share price and the company’s confirmation of the payout in 2014 should stabilize it,” Pawel Puchalski, an analyst at Bank Zachodni WBK SA in Warsaw, said by phone. “But operating risk factors are unchanged,” including weaker earnings before interests, taxes, depreciation and amortization as well as the change of the CEO.

Poland’s weaker economic growth, increased competition and the regulator’s decision to cut the rates operators charge each other for calls to their networks hurt earnings in past years. Netia, whose biggest competitors are local units of Orange SA and Deutsche Telekom AG, saw sales shrink 12 percent in 2013.

Sales Decline

Netia shares fluctuated between gains and losses today, falling 0.6 percent to 4.96 zloty as of 10:39 a.m. in Warsaw and extending this year’s decline to 5.9 percent. Warsaw’s benchmark WIG30 Index fell 0.7 percent today.

The company expects the country’s economic rebound to help trim the pace of its sales decline to 7.5 percent in 2014. Adjusted Ebitda will probably fall to 505 million zloty this year from 550.9 million zloty in 2013, the company said in a separate statement. Adjusted operating free cash flow will be 305 million zloty in 2014 and the company plans investments, excluding possible acquisitions, at 200 million zloty.

The operator, whose market value is 1.73 billion zloty, suspended its medium-term financial and operating forecasts.

Netia plans to spend annually at least 146 million zloty on dividends in the coming years. Possible higher payouts may require the company to boost its ratio of net debt to one adjusted Ebitda from 0.53 time at the end of last year, it said in the statement.

Last time the operator paid a dividend in 2006, returning 0.13 zloty a share, according to data compiled by Bloomberg.