La donna, or the State Treasury, seems to have changed its mind for the third time this time this week, regarding dividend payout in KGHM, indicating that it could actually be below 40%, depending on the company investment needs. Earlier it pointed out for a 40% and among 40-80% dividend payout.
Our view: We expect a neutral market reaction to the news. We stick to our expectation for a 80% dividend payout, considering that KGHM investment needs in 2007 would be close to normal level. It is unlikely that any of the supplementary projects (PAK, LOT, mines in China) would be concluded this year. We reiterate our Buy rating for the stock.