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China Mobile's net profit holds up, raises dividend payout – Nasdaq

China Mobile's net profit holds up, raises dividend payout – Nasdaq

Reuters


* Net profit up 0.2 pct at 108.7 billion yuan
    * Revenue rises 6 pct to 708.4 billion
    * Final dividend raised 3.9 pct
    * Full-year payout ratio raised to 46 pct of profits
    * Capex in 2017 to fall to 176 bln yuan from 187.3 bln in
2016

 (Adds capital spending plan, analyst's comment on dividend,
appointment of new CFO)
    By Sijia JiangHONG KONG, March 23 (Reuters) - China Mobile Ltd <0941.HK>,
the country's largest telecoms network operator, reported a 0.2
percent rise in its annual net profit on Thursday, despite
one-off gains boosting the previous year's result, and raised
its dividend payout ratio for the first time in a decade.
    China Mobile is among three state-controlled network
operators bracing for a revenue squeeze this year after the
government called on them to lower prices.
    The company is also set to invest heavily in developing a
higher capacity and faster fifth-generation (5G) mobile network,
which is due to be switched on by 2020, but Chief Executive Li
Yue said significant investment for 5G wouldn't start until
after 2018.
    Net profits last year rose to 108.7 billion yuan ($15.78
billion), meeting the 108.02 billion yuan average of 23 analyst
estimates in a Thomson Reuters poll. Underlying profits rose by
10.5 percent after stripping out one-off gains made in 2015.
    Nevertheless, revenue rose 6 percent to 708.4 billion yuan,
short of the average of analysts' forecasts of 714.59 billion
yuan.
    But the company said on Thursday the government's recent
call on telecom companies to lower prices is likely to reduce
its 2017 operating profits and revenues by around 7 billion
yuan, based on current usage.
    The company declared a final dividend of HK$1.243 per share,
from HK$1.196 a year earlier, with the total dividend for 2016
amounting to HK$2.732 per share, up from HK$2.721 for 2015 and
increasing the payout ratio to 46 percent of profits from 43
percent last time.
    The cash-rich company had been widely tipped as the next
major state-controlled enterprise to raise its payout ratio,
which has not changed since 2007, after China Shenhua Energy Co
Ltd <1088.HK> declared a special dividend equal to 15 percent of
its market value last week. [nNRA3j0l0b]
    However, Jefferies analyst Edison Lee said the rise in the
payout ratio was only offsetting the Chinese yuan's devaluation
against the Hong Kong dollar.
    "Large investment needs going forward could be the major
reason why management is conservative in this area," he said in
a note.
    The company said at a results news conference that capital
expenditure was expected to drop by 6 per cent in 2017 to 176
billion yuan.
    China Mobile, which has the world's largest 4G mobile
broadband network, said its 4G customers rose by 223 million to
535 million in 2016, making the penetration rate 63 percent.
    In a separate statement on Thursday the company also
announced that Dong Xin has replaced Xue Taohai as the chief
financial officer due to the latter's retirement, and appointed
a new non-executive director Stephen Yiu Kin Wah, effective
immediately.
 ($1 = 6.89 Chinese yuan renminbi)

 (Editing by Christopher Cushing, Greg Mahlich)
 ((Sijia.Jiang@thomsonreuters.com; +852 65313893;))

Keywords: CHINA MOBILE RESULTS/ (UPDATE 2, PIX)


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