Romania's Hidroelectrica promises 90%-100% dividend payout ratios ahead of IPO

Romania's hydropower company Hidroelectrica promises to increase its value by maintaining a high dividend payout ratio between 90% and 100% while the investments will be financed from external sources, according to Ziarul Financiarquoting the company's 2022 Supervisory Board Report.

The company is expected to list its shares at Bucharest Exchange under an IPO operated by Fondul Proprietatea this month.

As regards its operations (hence revenues and profits) this year, Hidroelectrica's output rose by 33% y/y to 4.4TWh in Q1, and the outlook for the year looks bright, given the forecast from the National Institute of Hydrology and Water Management (INHGA) for June, July and August cited by Economica.net.

Last year's drought reduced Hidroelectrica's energy production to only 13 TWh, compared to 16 TWh the previous year. However, this year the company was responsible in some moments of the day for delivering over 50% of the electricity to the national power grid.

"Hidroelectrica aims to distribute dividends in a predictable manner by granting them at least 90% of the net distributable result, the investment projects being financed from external sources, which currently have a substantially better cost advantage compared to equity financing," according to the 32-page Report of the Supervisory Board for 2022.

The document, published on the website of the state-owned company, presents the activity of the management in 2022 and starts with the subchapter that shows the steps initiated for the preparation of the listing on the BVB, among which the selection of banks and the intermediation union, the legal and technical consultant.

(Photo source: Facebook/Hidroelectrica)