Synthos SA, the rubber maker controlled by Polish billionaire Michal Solowow, surged to an 11-month high after proposing a record dividend.
The stock rose as much as 9.5 percent and traded 8.2 percent higher at 6.37 zloty as of 5:30 p.m. close in Warsaw, the highest since April. Synthos has been the best-performing stock in the benchmark WIG20 Index this year, adding 18 percent.
Management recommended a dividend of 0.76 zloty a share, compared with 0.5 zloty in 2012, the Oswiecim, Poland-based company said in a regulatory filing yesterday. The manufacturer of synthetic rubber used for production of tires will return to its owners a total of 1 billion zloty ($315 million) even as its profit fell 39 percent to 586.3 million zloty last year.
The proposal is “a positive surprise” and “implies a juicy yield of 12.9 percent on yesterday’s close,” Piotr Drozd, a Warsaw-based analyst at Wood & Co., said in a note today. “An average dividend-per-share of about 0.4 zloty could be sustainable going forward.”
Synthos also announced a new dividend policy, saying its payout may be higher than consolidated profit if net debt doesn’t exceed earnings before interest, tax, depreciation and amortization, or Ebitda. If net debt is more than 2.5 times Ebitda, management won’t recommend a dividend, it said.
Solowow, Poland’s third-richest man with fortune estimated at $1.9 billion by the Polish edition of Forbes magazine, holds a 62 percent stake in Synthos.