Telecom suspends dividend reinvestment plan

Telecom has suspended its dividend re-investment plan for its first quarter dividend, blaming uncertainty about the Government's broadband plans.

Shareholders who have elected to participate in the dividend reinvestment plan will receive a cash dividend at the same time as dividends are paid to shareholders who do not participate in the dividend reinvestment plan.

The dividend is payable on December 3.

New Zealand's largest telecommunications service provider said that when it announced it first quarter result and first quarter dividend on November 5 it expected an imminent announcement in relation to the Government's ultra fast broadband (UFB) initiative, in accordance with Crown Fibre Holdings' (CFH) expected timetable.

Telecom said today that it does not know when the next CFH announcement will be and it does not know the likely outcome of the UFB process.

Due to delays in the announcement it was not prudent to proceed with the issue of shares under its dividend reinvestment plan for the upcoming quarterly dividend, or undertake the associated on-market buyback of Telecom ordinary shares.

Telecom reported a net profit of $103 million in its first quarter, down from $163 million last year. It declared a dividend of 3.5 cents a share, compared with six cents per share last year.

- NZPA