Ceska Rafinerska will pay CZK 1.4bn (US$ 85.2m) in dividends, the company said on Wednesday. It said shareholders agreed to pay out the dividends from last year's CZK 333m net profit as well as from retained earnings.
Our view:
Given its 51.2% stake in Ceska Rafinerska, (188,94 CZK, 0,55%) will receive CZK 0.7bn in dividends. The cash influx should further improve the firm’s best-in-class balance sheet with CZK 2.5bn of net cash at the end of 2010 (7% of its market cap). As a result, the company will have a massive pool for immediate distribution. While (55,7 PLN, -1,33%) may be more willing to cash distribution at with its de-levered balance sheet, the utilization of free cash remains dependent on PKN’s strategy which is unlikely to be revealed in the next months. We expect to see slightly positive/neutral market reaction.