O2 Czech Plans Extra Payout as Profit Unexpectedly Increases

  • Management proposes to gradually disburse entire share premium
  • Third-quarter profit rises 4.2 percent to 1.46 billion koruna

O2 Czech Republic AS proposed an extra payout for shareholders after third-quarter profit increased on higher customer demand. The shares rose.

The board seeks to gradually disburse the entire share premium, which now totals 36 koruna per share, starting with a payment of 4 koruna apiece, the telecommunications company said in a statement on Tuesday. Regular dividend will be 90 percent to 110 percent of 2016 net income, having registered a 4.2 percent increase in its bottom line for July to September to 1.46 billion koruna ($59 million), above all five estimates in a Bloomberg survey.

O2 Czech, in which billionaire Petr Kellner’s PPF Group NV owns 84 percent, said its customers were increasing the usage of telecommunication services including its digital television channel, countering a decline in unit prices and the negative impact of European Union roaming regulation. As a result, third-quarter revenue increased 1.9 percent from a year earlier to 9.5 billion koruna, compared with the median analyst estimate of 9.3 billion koruna.

“The results exceeded our expectations as well as the market’s,” Komercni Banka analyst Miroslav Frayer in Prague said by e-mail. “The most interesting news is the decision to disburse the share premium” and “overall we regard today’s news as very positive.”

The stock price rose 2.9 percent to 235 koruna as of 12:01 p.m. in Prague, paring a three-day decline. It’s value has quadrupled since PPF moved its networks infrastructure into a separate entity in June 2015 to ease regulatory hurdles and the company announced the start of its dividend policy and a share-buyback program.

O2 Czech said today it expected full-year consolidated earnings before interest, taxes, depreciation and amortization between 10.4 billion koruna and 10.7 billion koruna and consolidated net income of 5.1 billion koruna to 5.4 billion koruna.

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