International mobile operator Cable and Wireless Communications (CWC) has announced it will halve its dividend in the coming year as it struggles against strong headwinds in its Caribbean market.
The dividend for the 12 months to the end of March will be eight cents per share, but that will fall to four cents in 2012/2013.
The market clearly shrugged off the bad news with CWC shares rocketing over 10% in the opening hour on Thursday after its full-year results.
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Total revenues rose to $2.88bn, broadly in line with the market consensus of $2.89bn, while underlying earnings were $901m, better than expectations of $887m.
In the year just gone, CWC sold its interests in networks in Fiji and Vanuata but continued investing in its core businesses in the Caribbean, Panama, Macau and Monaco with capital expenditure costs rising to $409m over the last year.
The firm was created after Cable & Wireless split in 2010 - its sister company, Cable & Wireless Worldwide, is currently a takeover target for Vodafone.
Commenting on the results, CWC's Chief Executive, Tony Rice said: "Data is the biggest opportunity for the telecoms industry, and in our markets we are only at an early stage...Penetration of smart devices is up from 14% of our customer base at the start of the year to 24% at the year end with mobile data revenues growing everywhere.
"Since the demerger we have faced global economic uncertainty which has impacted our business especially in the Caribbean. With this in mind, and having reassessed the financial outlook for the Group, combined with the opportunity to invest and achieve attractive returns, the Board has decided to rebase the dividend to US4 cents per share for the financial year 2012/13, subject to performance of the business in the coming year."
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