Trade union representatives have demanded bigger share of last year’s profit to be used for social fund, with the profit contribution to the fund to be doubled from last year, and reach PLN 100m, according to today’s ‘Puls Biznesu’ daily.
Our view: We would expect a slightly negative market impact from the news, as there seems to be no end to unions claims. Note that employee bonus payments are already linked to the level of profits. However, a potential increase in contribution to the social fund would have only minor negative impact on a dividend payout from 2006 earnings, estimated at PLN 2.7 bn, assuming 80% pay-out ratio, to be approved by AGM in late May 2007. We reiterate our Buy rating for the stock.