SmarTone cuts payout ratio to boost network
Firm books 18pc profit fall and says it has to invest to meet rising demand for mobile data
SmarTone Telecommunications has lowered its payout ratio to 60 per cent from 100 per cent, saying the move was prompted by the need to invest large sums in its networks to meet consumers' growing demand for mobile data and the government's 3G spectrum renewal policy.
The company yesterday proposed a final dividend of 22 HK cents per share, representing 60 per cent of the net profit for the second half of the year to June.
It said the payout ratio was cut to reserve cash for future investment to meet data-usage demand and improve networks.
SmarTone, a subsidiary of Sun Hung Kai Properties, said net profit for the year fell 18 per cent to HK$843 million.
Overall revenue rose 21 per cent to HK$12.1 billion, although service revenue fell 1 per cent to HK$5.66 billion. Revenue from handset and accessory sales grew 52 per cent to HK$6.4 billion.
Chief executive Douglas Li said the company was under pressure to increase service prices, but did not elaborate.