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O2 Czech Republic’s share price dips on falling profit

12 Feb 2015

Bloomberg reports that the share price of fixed line and mobile operator O2 Czech Republic fell 0.8% to CZK220.7 (USD9.69) – its lowest closing price in over a year and valuing the firm at USD2.8 billion – after it reported a worse than expected 30% slump in net profit for 2015, prompting speculation it may slash its dividend payments. The carrier, now majority owned by Petr Kellner’s investment firm PPF Group, said FY 2014 net profit fell to CZK4 billion on the back of falling returns from telephony and internet services, below the CZK4.3 billion average estimate of five analysts surveyed by Bloomberg. Revenue dropped by 5.4% year-on-year to CZK44.8 billion, it said. In a call with analysts, the telco’s CEO Tomas Budnik said his company was not in a position to estimate the dividend and future earnings before deciding on a potential asset spinoff and a loan request from its majority owner PPF. The chief executive went on to say that O2 CR has not yet decided on whether to hive off its fixed and mobile infrastructure into a separate entity or on a plan to meet PPF Group’s loan request of CZK24.8 billion. The two transactions ‘might be major factors to be considered in the dividend proposal,’ Budnik said. It is clear however, that the fall in O2 CR’s share price reflects growing market uncertainty and the potential impact on minority shareholders. The carrier paid a dividend of CZK18 per share in 2014, down from CZK30 in 2013 and CZK40 in 2012.

Czech Republic, O2 Czech Republic (incl. CETIN)

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