Telekom Austria announced that it will lower dividends for the years 2011 and 2012 from EUR 0.76 per share to EUR 0.38 per share. A dividend of 55 percent of free cash flow will be paid from 2013 as long as this doesn't lead to a deterioration in group equity. The cut in dividend is due to the difficult economic environment and volatile forex markets, especially in Belarus where the company has already taken heavy charges for the currency devaluation. In addition, the operator will need to reserve cash for upcoming spectrum auctions. Telekom Austria said the group is likely to exceed its target of net debt at 2.0-2.5 times annual EBITDA, and as a result, maintaining a stable, investment-grade debt rating of BBB will remain the key parameter for determining cash use. Furthermore the board of management agreed on a programme to improve operational performance and future efficiency. More details on this and future financial targets will be announced with the company's 2011 results, at the end of February 2012. Telekom Austria maintained its outlook for 2011, of EBITDA of up to EUR 1.55 billion, capital expenditure of EUR 700-800 million and an operating cash flow of up to EUR 800 million. The outlook is based on constant currency rates and excludes any impact from the Belarus devaluation. The company earlier announced lpans to adopt 'hyperinflation' accounting for the Belarus operations.
