Deutsche Telekom Plans Big Payout
In September we proposed to pay out a dividend of DM1.5 billion ($984.4 million) for this year, he told the paper in an interview released ahead of publication. And for next year we can also raise the prospect of an above-average dividend.
In a report sourced to senior board members, the news magazine Focus said Telekom planned to pay out a total of DM3 billion in dividends for 1997.
It said the dividend, combined with tax breaks for investors, would mean that the Telekom shares would have a probable yield of six per cent.
Finance director Joachim Koske recently said the shareholder payout next year would rank alongside other leading companies, and a Telekom spokesman declined to comment on the Focus report.
Sommer said the DM1.8 billion of reserves set aside from first-half operating profits meant that Telekom had now allocated all the funds it required to cover reductions in personnel between now and the year 2000.
But he said the full-year result would guarantee the payout for future shareholders, and added: For 1997 we are also counting on an improved result. Sommer said Telekom had completed most of its major structural projects to expand and improve its network.
This means our investment activity will decline over the next few years, our costs for personnel and for interest payments will also continue to fall, and so our financial commitments will also decline rapidly.
Sommer said Telekom's programme to cut its debt burden was on schedule.
We set ourselves the target of cutting our debt burden, which was DM125 billion when the joint-stock company was formed, by DM60 billion by the year 2000.
On June 30 we stood at DM98 billion ... Net debt was down to 65 per cent of total assets and is no longer an unusually high ratio. And we continue to reduce our debts rapidly.
Telekom said on Friday it would publish a preliminary issue prospectus - a so-called Pink Herring - on October 4. But the number of shares to be offered by way of a capital increase and the flotation price will only be fixed later.
A range will be set when the Red Herring final prospectus is published on October 22, with the final share price to be fixed at the weekend ahead of the first listing on November 18.