Kcell shareholders decided to postpone dividends for 2021

Kcell shareholders decided to postpone dividends for 2021

Almaty, 20 May 2022 – Kcell Joint Stock Company (“Kcell” or the "Company") (KASE: KCEL), one of the leading provider of mobile telecommunications services in Kazakhstan, announces that the Annual general meeting of shareholders (AGM) of Kcell JSC held on May 19 of this year decided to postpone the distribution of net income for payment of the 2021 dividends.


This was proposed by a major shareholder of Kcell JSC - Kazakhtelecom JSC, which owns 51% of the shares in Kcell. The country's largest telecom operator referred to the unstable economic situation, currency risks and the need for Kcell JSC to focus on the capex program. The current unstable economic situation in the world had a great impact on the current activities of Kcell JSC. Kcell JSC managed to achieve a rapid recovery of business and continued to demonstrate growth in key financial indicators, but at the same time, it is now impossible to exclude new external risks for the Company.


It was, therefore, proposed to postpone the payment of dividends and instruct the Board of Directors of Kcell JSC to, by 15 September 2022, submit proposals for the distribution of retained earnings for previous periods based on the company's performance in the first half of 2022. It was also proposed that the Company should use the retained funds to invest in new projects, primarily in social ones: providing broadband access in rural areas, building new base stations and other infrastructure, as well as improvement of service quality.


Taking into account the geopolitical and economic situation, we would like to avoid a situation where the Company's development plans would be exposed to risks due to factors beyond its control,” said a representative of Kazakhtelecom JSC Damir Mullashev. I would like to emphasize that we only propose to postpone the dividend payout for several months in order to create the necessary financial backlog for new projects, given the current conditions," he added.


Kcell JSC is one of the active participants in the 250+ program, which aims to provide mobile data coverage in rural areas. In the first quarter of 2022, the Company installed 300 new stations covering rural areas. New 3G/4G base stations were activated in 42 rural communities in addition to existing ones to improve network signal and coverage.


"This activity is being carried out as the Company continues to make large capital investments in its development. This is why it is proposed that the Company should retain the money for the time being, - noted Damir Mullashev. That being said, the Board of Directors has been instructed to submit proposals for the distribution of retained earnings of previous periods based on the results of the company's performance in H1 2022, in order to accommodate the interests of all shareholders. We expect that by fall the economic situation both in the country and abroad will stabilise, and that the Company's management will be able to reconsider its approaches to the formation of the necessary budgets both for development and payment of the 2021 dividends as planned," he concluded.








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Company Overview

Kcell is a national provider of the digital telecommunications services: mobile and fixed-mobile convergence (FMC) services, data transmission and Internet access, financial services, digital services and mobile applications, IT solutions in the field of system integration, the Internet of things, machine-to-machine connectivity, collection and processing of big data and cloud computing. Kcell is also a leading mobile operator in Kazakhstan providing the ‘smartphone+tariff’ service.


Kcell has become the largest digital ecosystem in Kazakhstan with a competitive advantage through its value-added services such as mobile financial services, mobile TV, online movies, music, books and magazines, as well as unique solutions for business customers. The company holds leading positions in the B2B market thanks to its strategy of vertical infrastructure solutions and development and implementation of the cutting-edge technologies. The company’s ​​4G/LTE network covers 67.5% of the country’s population and provides high quality services.


The company operates under its two brands - Kcell and activ that are widely recognized in our highly competitive telecom market due to the high quality of customer service. Thanks to its clear multi-brand architecture, Kcell increases its business efficiency in the B2C segment through optimal pricing for bundled offerings, customer base profitability management and network quality.