Telecom Egypt (TE) intends to cut dividends on shares to EGP 0.25, down from EGP 1 for the fiscal year ending in December 2017, based on a decision from the company’s board of directors.
The board of directors’ resolution aims to amend the dividend proposal to secure the company’s future revenues from submarine cable business, providing the cash needed to finance investment opportunities in the short term without increasing the company’s current debt, as well as achieving short-term returns from this investment opportunity.
The company intends to maintain its long-term dividend distribution policy for its shareholders in 2018 and beyond, according to Ahmed El Beheiry, chief executive of Telecom Egypt.
“TE aims to provide shareholders with annual dividends with a balance between dividends and reinvestment of cash flows in the company’s investment spending programme, which we see as the main driver of the company’s future growth,” he added.
Meanwhile, TE has announced that it has identified potential investment opportunities in the field of marine cables, which will maximise the company’s revenues in the field of marine cables and ensure the continued flow of current revenues from this activity.
El Beheiry described the investment opportunities that the company has identified as “very important,” and he assured that TE will continue to secure the revenues of the submarine cable business.
He noted that the decision to amend the proposed dividend to provide short-term financing for this investment opportunity is in line with Telecom Egypt’s prudent management of cash flow policy.