DiGi to pay 138% of net profit as dividend

SHAH ALAM: DiGi.Com Bhd said it will pay out 138% of its 2009 net profit as dividends after posting a full-year earnings that were in line with analysts’ expectations but which showed the effects of last year’s economic slowdown.
The full-year dividend payout, at RM1.78 per share and totalling RM1.38bil, is DiGi.Com’s largest in terms of proportion to its net profits and gives its shares a dividend yield of 8% based on yesterday’s closing price of RM21.10 per share.

DiGi used its strong cashflows and raised a little more debt to pay out its dividends. It is likely to maintain, if not increase, its dividend payments in 2010.
Johan Dennelind, chief executive officer of DiGi, explained: “It is no secret. We are gearing up to pay more dividends. We hope to reach the optimal use of our balance sheet and debt to equity level this year to maintain our yield story. We are not there yet.”

DiGi also enjoyed an increase its operational cashflows – essentially derived from its earnings before interest, tax, depreciation and amortisation (EBITDA) minus capital expenditures and which provides a good indication of cash available for dividend payments – to RM1.4bil for 2009 compared with RM1.27bil previously.