Bulgaria Gets Record Low Dividend Payment from State Firms

Bulgaria has received a record low dividend from its state-owned companies this year, it was revealed on Thursday.

Reasons include worsened financial performance of state-owned firms and a cut in the dividend rate to 70% from 80%, capital.bg said on Thursday, citing Finance Ministry figures.

The cut was introduced by the previous Socialist-Liberal government at the end of last year in a bid to boost investment by state-owned companies.

A total of BGN 54.3 M have been paid as dividend by state-owned companies this year, less than half of the BGN 113.5 M planned in the 2014 government budget and an eight-year low.

According to capital.bg, another reason for the drop in dividend payments was the concession made by the previous government which in June allowed the Bulgarian Energy Holding (BEH) to pay dividend calculated as percentage of group profit rather than individual profit. Thus, BEH has paid dividend from its consolidated profit of BGN 29.3 M rather than its individual profit of BGN 396.9 M.

While the change is not illegal it is something unusual in terms of dividend payments, capital.bg commented. According to legal advisors, the change might have been prompted by considerations aimed at preventing de-capitalisation of state-run companies.

The State Consolidation Company has paid BGN 4.6 M in dividend this year, compared with BGN 148.4 M last year. The Bulgarian Development Bank, however, has increased dividend payment to BGN 7.1 M this year from BGN 5.3 M last year.