Bloomberg News

Zon May Continue to Pay Dividends in 2012, Pereira da Costa Says

October 28, 2011

Oct. 28 (Bloomberg) -- Zon Multimedia SGPS SA, Portugal’s biggest cable-television provider, may continue to pay dividends next year even as revenue drops on a shrinking domestic economy, Chief Financial Officer Jose Pedro Pereira da Costa said.

A more than 10-fold increase year-on-year in third-quarter free cash flow to 37.9 million euros ($54 million) puts the company in a “in a very comfortable position,” Pereira da Costa said in a telephone interview yesterday.

“With significantly stronger cash flow, we may have several options on the table, such as keeping the dividend payout and reducing financial debt,” he said, adding that it was too early to say whether Zon would pay a dividend.

Zon paid a 16 euro-cent dividend per share this year and may pay an 18-cent dividend in 2012, according to a Bloomberg estimate. Third-quarter net income advanced 5.7 percent from a year earlier to 9.1 million euros, the Lisbon-based company said in a regulatory filing yesterday. Revenue fell 3.6 percent to 213.7 million euros.

Portugal’s government predicts the country’s economy will contract 1.9 percent this year and 2.8 percent in 2012 as spending is cut and taxes are raised to comply with a 78 billion-euro emergency aid program requested in April from the European Union and the International Monetary Fund.

Zon rose 0.5 percent to 2.34 euros at 11:08 a.m. in Lisbon trading. The stock has declined 31 percent this year, giving the company a market value of about 722 million euros.

--Editors: Robert Valpuesta, Tom Lavell.

To contact the reporter on this story: Henrique Almeida in Lisbon at halmeida5@bloomberg.net

To contact the editor responsible for this story: Angela Cullen at acullen8@bloomberg.net


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