The board of MOL announced yesterday that it will propose a total of HUF 35 bn dividend payment, or 8.8% of last year’s HAS based after-tax profits. The dividend translates to HUF 325 per share, almost double last year's level of HUF165.
The increase in dividend is not surprising as it was already indicated by the company last year. Although it lags our expectation of HUF 400 per share, we do not consider it as bad news. It indicates that the company sees more investment opportunities this year than we do.
Additionally, note that MOL’s purchase option on the state held 10% MOL stake is valid from May. If the company executes its option before its dividend payment, likely in late May, it would increase the per share dividend by 10% - given that the company does not pay dividend on those shares. (Magnolia-owned shares will be subject to dividends).