April 4 (Bloomberg) -- KGHM Polska Miedz SA, Poland’s sole copper and silver producer, climbed to the highest level in two weeks on speculation the government will seek to boost dividend payments to help narrow its budget deficit.
The shares advanced as much as 2.8 percent and closed 2.6 percent higher at 160 zloty in Warsaw, the highest level since March 20 and valuing the state-controlled company at 32 billion zloty ($9.8 billion). Turnover amounted to 140 percent of the three-month daily average, data compiled by Bloomberg show.
The government “takes into account a dividend higher than 30 percent” of profit, Deputy Treasury Minister Pawel Tamborski told reporters today. KGHM should pay out at least 30 percent of its 4.87 billion-zloty profit, Parkiet reported on Feb. 18, citing Treasury Minister Mikolaj Budzanowski. Only once in the last eight years has the government approved management’s proposal on dividend size. The dividend proposal hasn’t been presented yet.
“The government is under bigger pressure than in past years to get high dividends because of budget needs,” Bartlomiej Kubicki, a Vienna-based analyst at Raiffeisen Centrobank AG, said by e-mail today. “I expect 60 percent of last year’s profit to be paid out.”
The budget gap probably reached about 25 billion zloty in the first quarter, Deputy Finance Minister Hanna Majszczyk said today. That would account for 70 percent of the goverment’s full-year target as the slowing economy cuts tax revenue.
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