Erste Plavi Pension Fund Requests Double the Dividend Amount from Ericsson Nikola Tesla

Erste Plavi mandatory pension fund, a shareholder of Ericsson Nikola Tesla, has sent a counterproposal to the agenda of the ENT General Assembly, requesting double the dividend amount proposed, stating that the company, according to the latest unconsolidated financial report as of March 31, 2023, has ‘an exceptionally high amount of funds in the bank and cash position, namely 55.6 million euros’.

Therefore, Erste Plavi proposes that ENT pays a dividend of 12 euros per share. According to their proposal, the company’s profit of 19.5 million euros earned in the previous year should be distributed in such a way that 15.8 million euros is paid out as dividends to shareholders, while 3.7 million euros is allocated to retained earnings.

According to SKKD data, the largest shareholders of Ericsson Nikola Tesla are Swedish Ericsson, which holds 49 percent of the shares, followed by four domestic pension funds that together hold 15.5 percent of the shares. Erste Plavi Fund is the fourth largest shareholder with a stake of 1.8 percent.

– Considering the size and structure of the company’s assets and liabilities, where equity and reserves account for over 41.6 percent of the share, the company is low-leveraged, and capital expenditures for future periods can be financed by cash flows generated during those periods, or through new borrowing, which would also lead to a reduction in the average cost of capital for the company itself. By paying out dividends, the share of equity and reserves in the company’s liabilities would still amount to 33.9 percent, taking into account the financial reports for the first quarter of 2023, which we consider acceptable given the expected profitable operations of the company in the future. In light of the above, we believe it is justified to pay a higher amount of dividends compared to the amount proposed by the company’s management – they state in the counterproposal.

Let us remind you, the management led by Gordan Kovačević and the Supervisory Board of Ericsson Nikola Tesla proposed to the general assembly in April a decision to pay a dividend of six euros per share, which gives a dividend yield of approximately 2.7 percent. This is about 2.5 euros less than the dividend paid to shareholders last year, which amounted to 64 kuna per share.

Shareholders who will have shares registered in the Central Clearing Depository (SKDD) on June 20, 2023, are entitled to the dividend, the company stated.

The first day on which the shares are traded without the right to dividends (ex dividend date) is June 19, 2023, according to the company’s announcement. The general assembly of shareholders is scheduled to be held on June 14.

By the way, the company achieved a net profit of 119.17 million kuna last year, which is 32.8 percent less than in 2021. At the same time, its total revenues increased by 2.2 percent to 2.29 billion kuna, while total expenses increased by 5.5 percent to 2.16 billion kuna.