February 6, 2023

Taylor Daily Press

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Proximus will reduce dividends in the coming years and save 220 million euros | Invest and invest

Communications company Proximus will review its dividend policy. The company announced this morning. The aim is to maintain a “sound financial position”. There are also significant savings: €220m over the next three years. No jobs will be cut.

The earnings review is part of a new strategy for the coming years that the carrier is launching, dubbed “bold2025.” It appears that would “generate long-term growth and value creation.”

In concrete terms, Proximus will pay a total dividend of €1.20 per share at the end of 2023, just like last year. For the results of 2024 and 2025, this will be halved to €0.60 per share. The Belgian state owns more than 53 percent of the shares of Proximus. Halving the dividend will reduce treasury earnings by about 109 million euros per annum for the results of 2024 and 2025.

Cost savings

Proximus also announces the activation of a second round of cost savings in the amount of €220 million over the next three years. It appears that this will reduce the pressure on operating expenses due to inflation. The company does not disclose details of where to cut costs. “There will be no social plan,” said a spokesperson. So jobs will not be lost. Part of the savings comes from, among other things, the sale of the main office in Brussels, Proximus Towers. The plan provides for a total of more than 400 million euros in divestment operations.

For 2023, the telecom company expects a growth of 1 to 3 percent of turnover in domestic markets. Because of higher inflation, core EBITDA — in domestic markets and at the group level — will decline by about 3 percent year-on-year in 2023, the company predicts. EBITDA indicates the cash-generating capacity of a company and is therefore an indicator of the company’s vitality. It is profit before interest costs, taxes, depreciation and write-offs are deducted.

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The dividend cut was largely expected, but it turned out to be larger than expected. Investors sent the stock up more than 3 percent by midday.