Nera Telecommunications declared $0.15 dividend post POS business sale

An additional $0.01 dividend is expected at year-end.

Nera Telecommunications (NeraTel) announced a special dividend of SGD0.15/share post the sale of its point-of-sale (POS) business.

RHB notes that this represents a yield of 20% for 2016.

The research house expects an additional dividend of SGD0.01 at end-2016 if 4Q16 is profitable.

Moving forward, RHB believes that declining margins from equipment sales as well as intense competition are expected to pose challenges to NeraTel. On the bright side, order intake at the Infocommunications segment increased 38.2% YoY to SGD84.6m in 3Q16.

"The group is likely to go ahead with expansions in Indonesia, as NeraTel believes it to be a key market going forward. Key risks include stiff competition, leading to declining margins," it said.