Hidroelectrica assures investments will continue despite 100% payout ratio

The CEO of Romanian hydropower group Hidroelectrica (BVB: H2O), Karoly Borbely, assured that despite the 100% dividend payout ratio proposed by the management, the company has enough resources to finance its investment and maintenance projects.

"The dividend proposal reflects the performance commitment assumed by the company's new management team to the shareholders. [...] Accelerating investments in modernizations and new projects remains our main priority," said Karoly Borbely, quoted by Ziarul Financiar.

He assured that paying dividends and continuing investment is possible and that "it is a clear proof of the financial stability of Hidroelectrica, as well as of the extremely good prospects for the future."

The comment came after, on March 27, the company invited its shareholders to endorse, in April, full disbursement as dividends of the record profit achieved last year. This would result in an 11% dividend yield based on the share price when the dividend was announced and already pushed up the price of H2O shares by 2.7% on March 28.

The investors' concerns were amplified by some recent accidents that caused interruptions in the functioning of some production units.

As the majority shareholder of Hidroelectrica, the Romanian government is the main beneficiary of the record dividend payment. The management's decision was regarded in the context of the tight budget constraints during this electoral year.

(Photo source: Facebook/Hidroelectrica)