Largest Romanian company, Petrom, slashes dividends disbursed from 2008 profit

Petrom Bucharest (SNP), the largest Romanian company, has announced it could significantly reduce the dividends disbursed from the 2008 profit because of provisions set aside for employee-filed lawsuits and depreciation of the investments in Russia.

Representatives for Petrom did not specify how much the dividends would be cut and only said that they would be "significantly lower" than last year.

Petrom is the largest dividend payer in Romania, after having paid 813 million euros to shareholders over the last three years, 323 million euros of which last year alone.

The dividend reduction may seem surprising, after Petrom announced a record profit for the first nine months of last year, 2.29 billion RON (620 million euros), yet analysts believe it is only natural that the company should want to cut capital outflows, because it has to finance large investments and has already turned to banks and its majority shareholder for loans.

Ziarul Financiar