The country’s second largest telecommunications firm Globe Telecom Inc. has announced a higher cash dividend payout for shareholders, despite posting a steep drop in its fourth quarter income due to modernization costs and higher phone subsidies.
In a statement Friday, Globe said it had declared its first semi-annual cash dividend of P33.50 per common share, totaling P4.4 billion. This represents 86 percent of the firm’s core net income in 2012.
The amount translates to a dividend yield of 6.1 percent, based on end-2012 share price, and is payable on March 12, 2013 to shareholders on record as of Feb. 19, 2013.
“The payout is consistent with the company’s policy of distributing 75 to 90 percent of prior year’s core net income instead of reported net income to ensure that dividends remain sustainable and the resulting yields competitive,” Globe said in a statement.
In February last year, Globe declared a semi-annual dividend of P4.3 billion at P32.50 a share, also representing 86 percent of core income.
Globe started basing its dividend declarations on core profits instead of net profits in 2011 to ensure that payouts remained healthy despite higher costs tied to the company’s $790-million network modernization.
Core net income excludes all foreign exchange and mark-to-market charges, as well as non-recurring items, such as the accelerated depreciation charges arising from the IT and network modernization programs that Globe is currently undertaking.
Globe closed the year with a core net income of P10.3 billion, up 2 percent from P10 billion the previous year. The figure excludes foreign exchange and mark-to-market gains and losses, as well as non-recurring items.
In the fourth quarter alone, Globe’s core profit declined by more than half to P1.5 billion from P3.1 billion in the same three-month period the year before.
Globe’s reported net income for the fourth quarter also fell substantially, settling at P49 million from P1.8 billion the year before. Paolo G. Montecillo