Portugal Telecom announced plans to reduce its cash dividend and focus more on debt reduction, due to the difficult economic and financial market conditions. The annual cash dividend will drop to EUR 0.325 per share in 2012-14, from EUR 0.65 for 2011. The company will also run a share buy-back programme worth EUR 200 million for the three-year period, which it says is equivalent to an additional EUR 0.225 per share. In addition, the operator launched a bond offering of four-year, 6.25 percent notes, worth in total EUR 250 million. PT said its board "remains confident" about cash flow generation, "but a more prudent financial strategy substantially reduces financial risks". The company is now refinanced until the end of 2015 and shall be reducing its leverage in order to provide more flexibility for investments.
