Thursday February 19, 11:16 AM
MOBILE FAIR-Mobistar says cautious debt targets vindicated
BARCELONA, Feb 19 (Reuters) - Belgian telecoms group Mobistar (Brussels: MOBB.BR - news) says it feels vindicated by its strategy
not to take on more debt to boost returns in times when credit was easy.
'Our shareholders didn't see the value of creating huge debt if you don't have an industrial project behind it,' Mobistar Chief Executive Benoit Scheen told Reuters on Thursday at the Mobile World Congress in Barcelona, the wireless industry's biggest trade show.
Mobistar, in which France Telecom (Paris: FR0010560771 - news) has a 53 percent stake, has been the best performing share in the DJ Stoxx telecoms index over the past year, and Citigroup (NYSE: C - news) analysts recently called it 'one of the most defensive names in an already defensive sector'.
Its net debt stands at about 0.5 times core earnings, substantially below the median of 2.2 times in the telecoms index.
Scheen said the company could have borrowed if there had been a reason, such as an acquisition, but that was not the case, and it did not want to borrow and immediately turn the cash over to shareholders.
'I remember discussions two years ago, where all the analysts said: 'Why don't you leverage further than that, everybody is doing it',' Scheen said.
'Last week I was again in a roadshow in London, they were all very happy and they're not asking it anymore.'
(Reporting by Niclas Mika; Editing by David Cowell) Keywords: MOBILE FAIR/MOBISTAR
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