Impact Bucharest, a real estate development company, will not distribute any dividends this year for the first time in the last nine years. The company''s chairman and main shareholder, Dan Ioan Popp, explains this decision by the rising taxes on dividends.
Taxes on dividends for natural persons have been lifted from 10% to 16% starting this year in order to bring this tax in line with the taxation on income, salaries and banking interests.
"We will grant no dividends and the income will be included in the company''s reserves. This is what shareholders have decided. The main problem in the case of dividend granting was the high level of taxes," says Popp.
Impact was floated on the Stock Exchange in 1997, as the first company listed through public subscription, and over the last nine years the company has distributed considerable parts of its income to shareholders in the form of dividends. In recent years, dividend distribution has been followed by a share capital increase through contributions in cash by shareholders for the necessary investments.
This year, the capital may be increased directly with the sums derived from profit, but the company has not decided on this issue yet, and the profit has been transferred to the company''s accounting reserves.
Impact management early this year had announced plans to raise 40 million euros in 2006 from the capital market through a stock and bond issue. The company''s representatives stated they were considering a bond issue worth around 10 million euros, while the remaining 30 million euros were going to be raised from shareholders through a stock issue. No decision has yet been made regarding an increase in capital, with the shareholders authorising the Board of Directors to endorse a capital increase.
The company''s revenues last year surged by 48.5% from 2004, to 175.9 million RON (around 48.5 million euros), while its gross income dropped by 42%, to 13.1 million RON (3.7 million euros), according to Impact''s audited financial results for last year.
Impact last year decided to modify its customers'' contracts, replacing the euro with the RON as the currency in which customers are required to make payments, after in the previous year the domestic currency''s growth against the euro had hit the company''s revenues and profitability.
vlad.nicolaescu@zf.ro
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