Philip Morris CR (PMCR) unconsolidated net income declined by 31% y/y to CZK3.053bn for 2005, which is 6% below our estimate of CZK, which we believe is also the market’s expectation (note that no Bloomberg consensus was available). The implied EPS stands at CZK1,112. PMCR’s pay-out ration has been historically 100% hence we expect the company to pay CZK1,112 in dividends per share implying a dividend yield of 6.6% (based on yesterday’s closing price of CZK16,977). Dividends should be approved at PMCR’s AGM held on April 24. Note that the AGM decisive day and the dividend record day is April 11 (assuming the T+3 settlement). The ex-dividend day is therefore April 12.
Note that trading with PMCR shares will be suspended between April 18 and April 24. PMCR’s operations during 2005 were impacted by a tax hike in July, which increased the pressure on smokers to substitute to cheaper imports. PMCR introduced cheaper brands Clea and Next, which worsened the portfolio mix and hence margins. In addition, operating profitability was impacted by one-off costs of CZK 378m related to closure of PMCR’s plant in Hodonin.
In CZK m 2004 2005 y/y Patria est
Uncons. et income 4,410 3,053 -30.8% 3,256
Cons. net income 3,716 2,735 -26.4% 3,413