For the first time in the past three years, Romania's largest company - SNP Petrom had to admit that last year's profit was not enough for the company to grant dividends to shareholders this year.
The company posted $69m in net profit in 2002, but had to set aside more than $60 million to cover the past years' accounting losses, so that shareholders will have to wait one more year to gain from their Petrom stakes.
Thus, the Industry Ministry, owner of 92.96% in Petrom, last year cashed some $35 million from the company, but will get nothing this year, although this is one of its most profitable stakes.
The decision to pass dividends this year and the low profitability rate (3%) question one of the main reasons used by the Romanian officials to postpone privatisation: "Petrom's sound finances."
The main minority shareholders of the company are the trade union, US investment fund Broadhurst and the Financial Investment Company (SIF) Oltenia, with stakes exceeding one percent.
SIF Oltenia bought Petrom shares last year for an average price of 1,000 ROL and has come to own 1.5% in the company.
"We were expecting dividends, but our stake is too small for us to have a say when such decisions are involved. We do hope to earn from the stock's price increase on the Stock Exchange, though," said Tudor Ciurezu, economic manager with SIF Oltenia.
The last trading price for the Petrom stock on the Bucharest Stock Exchange was 1,180 ROL, down 10 percent since January.
Liviu Luca, leader of the Petrom union, says he does not mind.
"We aim to make as much money as possible in order to buy Petrom shares for the face value of 1,000 ROL, according to the law (the union is allowed to buy 10% of the shares upon privatisation, i.e.). But we can also earn from the price increase of the shares we own," Luca stated.
In fact, Petrom has recently endorsed a buyback programme for 1% of its shares for a maximum price of 1,500 ROL/share.
Petrom had to use the bulk of last year's profit to cover losses incurred in the past years, although the company's financial statements (drafted in accordance with the Romanian accounting standards) show no such losses. However, the company switched to the European accounting standards in 2001, which affected profits.
At any rate, 2002 profit dropped 26% in real terms as compared to 2001. The gross dividend granted last year amounted to 33 ROL/share. The company's turnover stood at 2.2 billion dollars.
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