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TIM S.A. (B3: TIMS3 and NYSE: TIMB), a leading Brazilian telecommunications company with a market capitalization of $7.2 billion and an impressive "GREAT" financial health score according to InvestingPro, announced today the launch of a new share buyback program, signaling its intent to optimize capital allocation and enhance shareholder value. The company, currently trading below its Fair Value based on comprehensive analysis, has demonstrated strong shareholder-friendly policies with a notable 7.9% dividend yield. The program, approved by the company’s Board of Directors, allows for the acquisition of up to 67,210,173 common shares, representing approximately 2.78% of the company’s total shares.
The initiative, referred to as Program 8, is set to commence immediately and will remain active until August 13, 2026. The buyback will occur on the stock exchange, with the shares being purchased at market prices within the legally and regulatory prescribed limits. This move aligns with the company’s strong financial position, supported by a healthy EBITDA of $2.04 billion and a robust free cash flow yield of 19%. The operations will be conducted through financial institutions including MORGAN STANLEY, J.P. MORGAN, BTG PACTUAL, and UBS BB.
The goal of the program is to manage the company’s available cash resources more efficiently, with the majority of the repurchased shares slated to be held in treasury and subsequently canceled, thereby potentially increasing the earnings per share for remaining shareholders. A smaller portion of the repurchased shares, less than 8%, is designated to support the company’s Long-Term Incentive Plan (LTI), which is aimed at stock-based compensation.
Funding for the buyback program will come from the company’s profit reserves, which amounted to R$6.28 billion as per the financial statements ending December 31, 2024. The maximum amount allocated for Program 8 is R$1 billion.
Concurrent with the announcement of the new buyback plan, TIM S.A. also disclosed the termination of its previous buyback program, Program 7, which had been approved on July 30, 2024. No shares were acquired under Program 7.
The company has committed to keeping shareholders and the market updated on the progress of the new buyback program, adhering to applicable regulations. The detailed information regarding the program is available on the company’s investor relations website, as well as on the websites of the Brazilian Securities and Exchange Commission (CVM) and B3.
This strategic move by TIM S.A. is based on a press release statement and reflects the company’s ongoing efforts to manage its financial resources and reward its investors. With a P/E ratio of 13.27 and strong year-to-date returns of 25.17%, the company continues to demonstrate solid market performance. For deeper insights into TIM’s financial health and growth prospects, including 12 additional ProTips and comprehensive valuation metrics, visit InvestingPro, where you’ll find detailed Pro Research Reports that transform complex Wall Street data into actionable intelligence.
In other recent news, TIM S.A. has settled its disputes with Banco C6 S.A., monetizing its minority stake in the bank, which is expected to generate a gross revenue of approximately R$280 million. The partnership’s termination will see TIM transfer all its shares and outstanding subscription bonuses to C6 for a sum of R$520 million before taxes, pending approval from the Cayman Islands Monetary Authority. These are recent developments in the company’s ongoing strategy to optimize its business.
In addition, the telecommunications firm has scheduled its Annual Shareholders’ Meeting for March 2025. The meeting is a routine corporate governance practice, allowing shareholders to engage with the company’s management on various matters. More details will be shared with shareholders and the public once the call notice and related documentation are prepared and released.
Lastly, TIM S.A. has announced an interest on equity payment of R$650 million. The board-approved distribution is slated for payment by January 2025. The gross value per share stands at R$0.268528123, totaling the announced R$650 million, subject to possible modifications if the company decides to sell treasury shares for its Long-Term Incentive Plan.
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