Annual Shareholders Meeting decided yesterday on the dividend payout from 2006 earnings. The management proposal stood at PLN 7 per share (40% payout), but the State Treasury (holds 42.5% of shares), decided to pay out 100% of the profit, resulting in PLN 17 dividend per share, implying a 14.6% dividend yield. Preliminary record date is set at June 25, payout date at July 10.
We believe that the higher than expected dividend payout (we anticipated 80%) is unlikely to impact KGHM capital expenditure program, given company’s considerable cash position (PLN 2.5bn) and strong cash generation (PLN 4.2bn for ’07), despite the management and unions
lament. We do not expect any major price reaction on the back of the news today, after 3.5% price rise yesterday.