The deputy Economy minister Mr. Dabrowski said yesterday during the day that he would see the dividend payout ratio from KGHM 2006 net earnings at 80%, rather than 40% proposed by the company’s management earlier and versus our estimate of 50% payout ratio.
Our view: Assuming that ST sticks to its dividend proposal at company’s AGM, which we see likely, KGHM dividend yield for ’06 would rise to 15.4%, based on our PLN 3.4bn net earnings estimate for 2006, dividend payout of 80%, and the dividend amounting to PLN 13.5 per share. Although positive, we do not expect the news to impact today’s trading, as it had been announced intraday. We reiterate our Buy rating for KGHM.