* Does not plan to hedge higher share of sales than in Q4
* Decision on future hedging may depend on dividend payout (Adds more detail, quotes, background)
By Agnieszka Barteczko and Adrian Krajewski
WARSAW, June 1 (Reuters) - Copper hedging at Polish miner KGHM may not reach the record levels of the October-December period in the coming quarters, as the rebound in metal prices secures profitability, its head of hedging said.
"In the fourth quarter we had the highest level of hedging in our history and we don't think that in the coming quarters our sales will need to be hedged at such high levels," Jaroslaw Romanowski told Reuters in a phone interview on Monday.
The boost KGHM received from hedging operations almost halved quarter-on-quarter in the first three months of the year to 245 million zlotys ($78.4 million), as the share of hedged sales fell to 28 percent from 53 percent in the fourth quarter.
"It (the first quarter) was a time to make use of our earlier hedges rather than open new ones," Romanowski said. "Be mindful that the price of copper fell to $2,700 a tonne in December, while no earlier than in July it exceeded $8,000."
Copper prices have surged about 60 percent this year, breaking the psychological $5,000 a tonne on Monday -- its highest level since mid-October, and dealers are looking for the rally to continue at least in the short term.
KGHM has hedged 63,000 tonnes, around a fourth of its first-half output, at over $6,000 a tonne, but analysts point the impact of favourable hedging positions the miner entered in mid-2008 will start to wane in the second half of 2009.
KGHM, which sells copper in dollars but calculates costs in zlotys, said earlier it did not open new copper price hedging operations in the first quarter. It now expects this year's average copper price at $3,800 per tonne.
Growing signs of improving prospects pushed KGHM Chief Executive Miroslaw Krutin to yield to pressure from the state treasury, saying the state-controlled miner would make a fresh proposal on a possible dividend payout on Friday.
KGHM shares surged as much as 17 percent after a governmental source told Reuters last month the government would likely seek a dividend equal to nearly its entire 2008 profit of 2.9 billion zlotys despite the management's earlier opposition.
Romanowski admitted that the miner's hedging policy may also depend on the amount of dividend it was to pay out, as well as on the investments the company would embark upon.
"The higher the dividend level, the higher the risk of the company's functioning and the higher the tendency to hedge future revenue," he said.
He declined to say if KGHM opened new hedging positions this quarter, but added that "copper prices close to $5,000 a tonne are more favourable for hedging than $2,700."
KGHM shares jumped 6.3 percent thanks to stronger copper and wider improved sentiment, in line with Warsaw's main WIG20 index . (Editing by Rupert Winchester)