KGHM Polska Miedz SA, Poland’s sole copper and silver producer, led gains among state-controlled companies on speculation a widening budget deficit will prompt the government to seek higher dividends.
KGHM, the most profitable state-controlled company last year, climbed to a two-week high. Insurer PZU SA jumped as much as 2 percent and PKO Bank Polski SA, the biggest Polish lender, rose 1 percent after PAP reported today, citing Treasury Minister Mikolaj Budzanowski, the government will seek “the highest possible dividends” from the financial institutions.
The ministry will seek dividends from all companies in which it has stakes to meet its 2013 budget revenue goal of 5 billion zloty ($1.55 billion), Budzanowski told reporters yesterday. The budget gap reached about 25 billion zloty in the first quarter, or 70 percent of the government’s full-year plan after the economic slowdown cut tax revenue, Deputy Finance Minister Hanna Majszczyk said yesterday.
“KGHM could be forced to take on at least 1 billion zloty of leverage this year and will then be able to finance its capital expenditure plans plus dividends,” Robert Maj, an analyst at KBC Securities in Warsaw, said in a note today.
KGHM rose 1.4 percent to 162.2 zloty at 12:02 p.m. in Warsaw, extending its 2.6 percent gain yesterday, while PZU gained 0.6 percent to 400 zloty. State-controlled refiner PKN Orlen SA increased 0.9 percent to 50.25 zloty and Grupa Lotos SA, its local competitor, was up as much as 1.2 percent.
The government “takes into account a dividend higher than 30 percent” of KGHM profit, Deputy Treasury Minister Pawel Tamborski told reporters yesterday. KGHM should pay out at least 30 percent of its 4.87 billion-zloty profit, Parkiet reported on Feb. 18, citing Minister Budzanowski.