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Given that the effects of the crown pandemic on the financial market are currently uncertain, the short-term refinancing requirements for promissory notes in the amount of around 700 million euros on freenet could present challenges in October 2020 and March 2021 the company said Sunday in Hamburg. Therefore, apart from the mandatory minimum dividend of 0.04 euros per share, the Annual General Meeting should be proposed to retain the actually planned dividend.
The goal is to maintain the group’s financial stability and flexibility so that it can remain operational even if the situation worsens. The annual general meeting is scheduled to take place online on May 27.
Going forward, the company intends to go back to the original dividend policy and distribute at least 80 percent of free cash flow. However, dividend cancellation is likely to be a major blow to shareholders, since freenet is considered a classic dividend value. In late February, the company had announced a constant distribution of 1.65 euros per share.
Free cash flow increased about 10 percent to 49.9 million euros in the first quarter, the company also announced Sunday night. But that was mainly due to reduced inventories.
Because: Earnings before interest, taxes, depreciation and amortization (Ebitda) fell in the first quarter 3.4 percent to 104.2 million euros. This was due to new legal regulations for roaming costs on international calls. Therefore, the growth in sales in the mobile communications business and the increase in the number of contracted clients did not have an impact on the operating result. The television business, however, remained more or less stable. Group-wide sales in the first quarter increased 4.3 percent to 648.8 million euros.
Meanwhile, Freenet sticks to the annual forecast for the end of February. The company is a mobile phone provider without its own network, which leases free capacity to network operators and therefore offers its own rates. The company also offers digital television with antenna and Internet broadcast and sells accessories for smartphones and other lifestyle devices in its own stores.
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HAMBURG (dpa-AFX)
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Image sources: JOHN MACDOUGALL / AFP / Getty Images
