Today, Cinkarna Celje published that it had received two counterproposals to its dividends, one from SDH, which proposes EUR 3.2 per share, DY of 15.3% (based on the initial price before the Cinkarna Celje’s proposal, to provide a like-for-like comparison), while VZMD proposed that the dividend proposal remains the same (EUR 2.77 DPS, DY of 13.3%). Since this is the dividend that was supposed to be paid out last year, from the 2022 net profit, VZMD proposes that it be paid out combined with the dividend that is to be paid out from the 2023 profit, which is still to be announced at the GSM meeting to be held later in the year.
Starting off with the SDH proposal, they propose a distribution of profit in the amount of EUR 25m, out of the balance sheet profit, which would imply a dividend of EUR 3.20 per share. As the initial proposal already increased the price of the Company’s shares, to provide a like-for-like comparison, the DY amounts to 15.3%, based on the price before Cinkarna Celje’s initial proposal. SDH believes that Cinkarna Celje can make this payment without negative consequences for its operations, as 2022 was extremely successful. Furthermore, the Company is debt free and its financial situation is good and stable. Also, SDH announced that they will object to the initial dividend proposal by Cinkarna Celje and that they will get the other shareholders to favor his vote.
Moving on to VZMD, they propose that the dividend payment from the 2022 profit would remain the same as the one Cinkarna Celje proposed (EUR 2.77, DY of 13.3%). However, to avoid the higher costs of two dividend payments, they propose that this dividend be paid out in combination with the dividend from the 2023 net profit. To understand this, we have to go back to 2023. Cinkarna Celje decided not to pay out the dividend in 2023, from the 2022 net profit during 2023, as it received Government support in the amount of EUR 5-7m. As such, if it did pay out the dividend during 2023, it would have to pay back this support, thus increasing costs significantly. Due to this, the Company decided to pay out the dividend at the beginning of 2024, thus the proposal Cinkarna made during the Convocation of the GSM a couple of weeks ago.
The difference here then is the fact that VZMD is requesting that this dividend be paid out in combination with the 2nd dividend they expect will be paid out in 2024, from the 2023 net profit. Furthermore, they propose that these 2 dividends be paid out together and that the ex-date and payment date be the one from the 2nd dividend.
We would like to emphasize, however, that according to the financial calendar, the GSM meeting is planned to be held on 19 June 2024. Initially, it was planned that the 2023 dividend would be paid on 28 June 2024, as this data stands in Cinkarna’s financial calendar. As such, if beforehand the 2nd dividend is proposed, and afterward accepted, if this counterproposal is accepted, shareholders would see the combined dividend payment somewhere at the end of June.
