Hungary, Budapest: The board of directors at brewery Brau Union Hungaria, a Hungarian subsidiary of the Heineken group, recommends that the company set aside the company's HUF 909 million 2004 profit as retained earnings and pay no dividend, Interfax-Europe posted on April 5. Brau will hold its AGM on April 21.

The decision likely comes as an unwelcome development for the firm's remaining small shareholders, who now own just 1.81% of the company after a recently closed public offer. Brau's net income dropped to HUF 909 million from HUF 2.69 billion a year earlier. The company did not pay dividend after its 2003 earnings either, despite the protest of minority shareholders.

Brau sold 7.8% more beer in 2004 than a year earlier, while the total market decreased by 2%. Thus the company's market share was up by 2.3 percentage points to 27.1% last year, according to the company's AGM documentation.

Investments totalled HUF 3.26 billion in 2004, significantly up from the previous year, due to changes related to the merger of Brau and former Hungarian Heineken subsidiary Amstel, the company noted. "Disappointing 2004 figures” and high investment spending resulted in negative operating cash flow of HUF 2 billion in 2004, Brau added.

Other items on the AGM’s agenda include the cancellation of employee shares, as a result of which registered capital will drop by HUF 1 million to HUF 6.626 billion after the AGM.

Separately, Brau announced that outstanding minority shareholders have 30 days to hand in their shares, following a public offer closed last week in which Brau Immobilien GmbH increased its stake to 98.19%. Brau is expected to be delisted from the stock exchange after the completion of the process.