Brazil is once again a key cash generator for Telefónica through the dividends paid by the subsidiary in the Brazilian giant. Thus, the Board of Directors of Telefónica Brasil has approved a new remuneration for shareholders, through the formula of equity interest, traditional for companies in the country.
In this case, the gross amount of this new remuneration for investors, already charged to the accounts for the year 2021, amounts to 630 million reais (about 105 million euros). Shareholders registered before June 30 will have access to this dividend.
Since the beginning of the year, Telefónica Brasil has approved the payment of dividends for an amount of more than 1,330 million reais (about 223 million euros). Dividend yield through April was 7.9%, the company indicated in its latest corporate presentation to investors.
Telefónica Brasil has always highlighted to the financial community its strategy of high remuneration for shareholders, thanks to its capacity to generate cash. In the first quarter of the year, free operating cash flow after leases amounted to 2,199 million reais, 3.7% more than in the same period of the previous year.
The approved equity interest will now be paid before July 31, 2022, although it will be the operator’s board of directors that sets the exact date for the disbursement.
In any case, Telefónica Brasil already has planned the next dividend disbursements charged, in this case, to fiscal year 2020. The first payment will take place on July 13, for an amount of 2,600 million reais. The second will be on October 5, for a total of 2.8 billion reais. With the sum of both payments, the dividend per share will amount to 3.25 reais.
The first beneficiary of these investor remunerations will be Telefónica itself, given its position as the main shareholder of the Brazilian subsidiary, with a 73.9% stake in the company. This is followed by the manager Artisan Partners Limited Partnership, with a stake of close to 5% of the capital. Brandes Investment Partners, Blackrock and Macquarie Group, among other firms, have a minority presence.
In addition, within this scope, Telefónica Brasil currently has a share buy-back plan in force. As of April 30, the company had acquired a total of 5.4 million of its own securities on the market, equivalent to 0.32% of the capital.