Dividend Payout Ratio

Hi Guo Cai No need but good to check on income support or distribution from capital which must be excluded from the calculation of DPU and yield.

Victor, Rusmin, While going through HKBN financials for the past years since its IPO, I noticed that their dividend payout ratios have always surpassed 100%. FYE EPS DPS Payout Ratio 31/08/2015 0.104 0.2 192.3% 31/08/2016 0.244 0.4 163.9% 31/08/2017 0.171 0.45 263.2% 31/08/2018 0.396 0.56 141.4% 31/08/2019 0.184 0.7 380.4% 31/08/2020 0.066 0.75 1136.4% 31/08/2021 0.14 0.765 546.4% 31/08/2022 0.374 0.6 160.4% 31/08/2023 -0.967 0.4 (41.4)% 31/08/2023 0.007 0.315 4500.0% Am I missing something? Pls help to explain how can the company sustain such dividend payout? Is it because HKBN has included non-cash items (depreciation & amortization) in its EPS calculation? Or is it because its strong FCF is the reason? So, for this kind of company, the >100% payout ratio is not a deal breaker. Is this correct?

Victor, Rusmin, While going through HKBN financials for the past years since its IPO, I noticed that their dividend payout ratios have always surpassed 100%. FYE EPS DPS Payout Ratio 31/08/2015 0.104 0.2 192.3% 31/08/2016 0.244 0.4 163.9% 31/08/2017 0.171 0.45 263.2% 31/08/2018 0.396 0.56 141.4% 31/08/2019 0.184 0.7 380.4% 31/08/2020 0.066 0.75 1136.4% 31/08/2021 0.14 0.765 546.4% 31/08/2022 0.374 0.6 160.4% 31/08/2023 -0.967 0.4 (41.4)% 31/08/2023 0.007 0.315 4500.0% Am I missing something? Pls help to explain how can the company sustain such dividend payout? Is it because HKBN has included non-cash items (depreciation & amortization) in its EPS calculation? Or is it because its strong FCF is the reason? So, for this kind of company, the >100% payout ratio is not a deal breaker. Is this correct?

Hi Daniel, you have to use dividend per share over diluted adjusted free cash flow for the payout ratio. HKBN has high depreciation and amortisation which are non cash items.