At the company’s AGM on April 26, the board of MOL
will suggest dividend payment of HUF 50bn or HUF 508 per share, according to the detailed invitation to the AGM, revealed on Friday.
Our view: Dividend represent payout ratio of 16.9%, up from 14.1% paid out from 2005 earnings. At the end of 2006 MOL
had a net cash position of US$ 1.03bn (HUF 188bn), representing a gearing (net debt to equity) of -14.8%. After the company spent some HUF 50bn on extending its stake in TVK in January and plans to pay another HUF 50bn in dividend, we see gearing at -9.6% at the end of the first quarter. When calculating a targeted net debt to equity ratio of 40%, this provides some US$ 3.5bn financial flexibility for the company to make acquisitions. Thus, speculation of acquisitions will remain the major catalyser for the share price, in our view.