Portugal Telecom sells off on Q2 results, dividend cut


Portugal Telecom shares (PT -7.9%) fell hard after releasing Q2 results.

EPS of €0.28 was up 257% Y/Y, on the back of a €310M one-time gain on the sale of PT's stake in a Macau carrier (positive EPS impact of €0.34). However, revenue fell 5.5% Y/Y to €1.54B. The Portuguese business' revenue fell 4.4% Y/Y to €645.5M, and revenue from indirectly-owned Brazilian telco Oi fell 7.9% Y/Y to €694.4M due to devaluation of the real.

EBITDA fell 7.9% Y/Y to €277.6M. FCF turned positive to €170.4M from -€200.4M in Q2 2012, thanks to the CTM stake sale.

The company also guillotined its dividend as it attempts to manage €4.6B in debt with minimal cash flows. The dividend will be €0.10 per annum in 2013 and 2014 (implied forward yield of 3.3%), down from €0.325 in 2012. (6-F), (presentation)

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