Cesky Telecom’s AGM on Friday approved its first-ever dividend of CZK 7.50 per share (gross). The record date for the dividend was set as June 29, and the dividend is to be paid by September 15, 2001. Given that a dividend payment had been uncertain ahead of the AGM, the decision to pay the dividend (which represents 38% of the 2000 EPS of CZK 20) was good news for the stock. The company is overcapitalized (total assets are 66% financed by equity), its ROE is low (6.3% in 2000), and returning some of the equity to shareholders is the appropriate thing to do. Paying the dividend will not make a critical difference to Cesky Telecom’s ability to acquire an additional 49% of Eurotel (if such deal is concluded), as its balance sheet is still strong enough to support significant debt expansion.
Friday’s AGM also approved several board changes (insignificant for the stock) and agreed to transform TelSource’s stock (27% of total stock) into standard bearer shares (previously registered shares with limited transferability) ahead of privatization.
(Ondřej Daťka)