Union representatives voiced their anger following the State Treasury suggestion for a 80% dividend payout from company’s 2006 earnings. They said they would demand an additional bonus (PLN100m?) from last year’s earnings, as a price for their consent to the higher dividend pay-out.
Our view: It looks like no deal with KGHM unions is actually a deal. The unions do not seem to respect the recently signed agreement linking bonus payments to the size of company’s earnings. Nevertheless, we expect State Treasury to go ahead with its proposal. We reiterate our Buy rating for the stock.