KGHM may again pay out all its income as dividend

MG
25-02-2008, 10:15

Warsaw (Puls Biznesu) – The company is without 2008 budget plans. The chances that it will pay out the dividend are getting bigger and bigger. Investors hope to get PLN 1.8bn (EUR 504.2m).

 

 

No dividend from KGHM copper producer’s 2007 income – this is what Citizens’ Platform (PO) members promised after the party had won parliamentary elections. They said, however, that this would be possible only if a good investment plan for this year was presented. There are only 3 months left to the GSM which should decide how to split last year’s net income of PLN 3.79bn. But the company still has no budget plans for this year. In the past, it would be approved in January. Meanwhile, temporary board is managing the company which surely won’t make any strategic decisions.

 

Last year, despite protests from the employees, 100 percent of 2006 income was paid out as dividend. The reason was that the management had failed to prepare an investment plan. Is it possible that the same scenario happens again?

“In 2007, KGHM spent PLN 900m for investments. This year, it will be PLN 1.1bn. At the end of last year, the company had PLN 2.5bn of cash. These data rightly are a sign for shareholders that the company should spend 50 percent of last year’s income, or PLN 1.8bn, for dividend. Such are the expectations, and I believe they are right”, Andrzej Knigawka from ING Securities commented.

 

Trade unions fear that the company will again be deprived of the whole income, or its majority.

“Millions of zloty of investments are needed because production decreases”, Ryszard Zbrzyzny, head of KGHM’s biggest trade union: ZZPPM and LiD leftist democratic party MP said.

“The company needs investments so that the hen which lays golden eggs does not die. The management should convince the biggest shareholder, i.e. the state about it. I’m worried that future CEOs have not been connected with the company before and it will take even a year for them to learn the problems”, Jozef Czeczenski, member of the supervisory board and head of Solidarnosc trade union at KGHM added.

 

Today, the new supervisory board of KGHM is meeting for the first time. It will listen to the management’s report, which is an introduction to discussions about the budget (this year, KGHM plans to have PLN 3bn of income). The plan was prepared by former CEO. If the supervisory board wants to change it, further weeks will pass. The plan may be approved in April. Today, the management changes are possible as well. Ireneusz Reszczynski will be substituted with Marek Trawinski.

(PLN 1 = EUR 0.280)

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