Dividends paid to shareholders of companies around the world could drop by up to 35% in 2020, at a time when the coronavirus pandemic will reduce companies’ profits, according to data published by the asset management company Janus Henderson. In the first quarter, the crisis had a limited impact on the payment of dividends, which increased by 3.6% globally, to a record level of USD 275.4bn. What is the situation of energy companies in Romania?
The level of uncertainty for the rest of the year is so high that Janus Henderson has said it couldn’t provide an accurate estimate on dividends paid for 2020, so it has provided several scenarios. According to the optimistic scenario, global dividends will drop by at least 15%, to USD 1,121bn this year, while, in the worst-case scenario, dividends could drop as much as 35%, to USD 933bn. “The breadth of the range reflects the rapidly changing crisis and the likelihood that many companies will simply reduce their payouts, rather than cancel them altogether,” Janus Henderson says.
On regions, Europe and the UK would be particularly affected by the decrease in dividends, the regulators requesting banks to suspend payments to shareholders, and several oil companies have already decided to cut dividends. In turn, the US could be less affected, as the US companies would prioritize share buybacks rather in relation to dividend payment, Janus Henderson estimates.
Hidroelectrica will distribute dividends in addition to those initially provided
The largest power producer in Romania, Hidroelectrica, controlled by the state through the Ministry of Economy, Energy and Business Environment (MEEMA), with a 80% stake, will grant shareholders additional dividends of RON 750mln, in addition to those of over RON 1.25bn already considered, the proposal in this regard of Fondul Proprietatea, which owns a 20% stake in the company, being approved by the majority shareholder, payment following to be made by September 30. Therefore, the Romanian state will collect RON 600mln of this additional distribution and Fondul Proprietatea – RON 150mln. Including the initially proposed distribution, of RON 1.253bn, the total value of dividends granted by Hidroelectrica would amount to over RON 2bn. Hidroelectrica ended last year with an EBITDA of over RON 3bn, at a turnover of RON 4.14bn.
OMV Petrom, dividends accounting for 48% of last year’s profit
OMV Petrom, the largest oil and gas producer in Central and South Eastern Europe, will grant shareholders a dividend of RON 0.031/share. The amount distributed for dividends represents about 48% of the net profit posted last year, of RON 3.6 billion.
“We have maintained our proposal to distribute dividends, despite the pressure our industry is under, in the context of the coronavirus pandemic and the sharp drop in oil prices. The approved dividend reflects the 2019 performance of OMV Petrom. In this difficult period, we maintain our commitments to our shareholders – including the Romanian state,” said Christina Verchere, CEO of OMV Petrom.
The account of the Romanian state, which owns a stake of over 20% in OMV Petrom through MEEMA, will be fed with around RON 360mln.
Aggregate dividend of RON 7/share at Conpet
Conpet has proposed an aggregate dividend of over RON 7/share, with a net yield of 8.5%. The Ordinary General Meeting of Shareholders at Conpet Ploiesti approved the Board of Directors’ proposal to redistribute the net gain of RON 65.32mln obtained by the company last year. Therefore, RON 1.12mln is the reinvested profit, RON 6.40mln will be employee participation in profits and the amount of RON 57.75mln, the equivalent of 88.43% of the net result, will be distributed to shareholders in the form of dividends. The proposed gross dividend, due for payment on June 25, is RON 6.67135515/share. At the same time, the company that ensures pipeline oil transmission in the country will distribute from reserves, also in the form of dividends, the amount of RON 3.3mln. The value of the gross dividend is RON 0.38095632/share. The aggregate dividend is RON 7.0523147/share and, at the latest price on the stock exchange, of RON 78.80/share, it gives shareholders a net yield of 8.5%.
In the first quarter of this year, the operator of the national system for oil, NGL, gasoline and ethane transport through pipelines reported a net profit of RON 16.3mln, up by almost 13% compared to the similar period of last year. The operating income increased by 7.3%, to RON 113.69mln, while expenses went up only 6.7%, to RON 96.6mln. The transported quantities increased by 11%, to RON 1.838 million tons, and the transported oil quantities from domestic production increased only marginally, by 0.5%, to 874,000 tons, those coming from import increasing by almost 23%, to 964,000 tons.
Engie Romania will not distribute dividends, the profit being included in reserves
Engie Romania, formerly GDF Suez Romania, controlled by the homonymous French group and where the Romanian state owns a 37% stake, plans not to distribute dividends to shareholders from the profit posted in 2019, following to be included in reserves as retained earnings, according to a document of the company. Engie Romania last year posted a net profit of RON 335.7mln, down by over 26% compared to 2018 (RON 455.92mln). During 2019 the provisions of GEO No. 114/2018 were applied, according to which Romanian gas producers were forced to sell their production to suppliers to household consumers at the capped price of RON 68/MWh. On the other hand, as of July 1, 2019, ANRE reduced the regulated supply price for population applied by Engie by almost 8%. In the annual report for 2019 of the parent group it is shown that Engie operations in Romania last year recorded a net profit of around EUR 95mln, by 9% higher compared to 2018 (EUR 87mln) and revenues went up by over 16%, to EUR 1.436bn. The proposal to include in reserves the profit obtained in 2019, made by the Board of Directors, must be approved by shareholders in the GMS. The shareholders of Engie Romania are the investment vehicle registered in the Netherlands, Romania Gas Holding BV, controlled by the French group Engie, formerly GDF Suez, with a stake of 51%, the Romanian state through the Ministry of Energy, with almost 37% of the capital and Fondul Proprietatea, with a stake of around 12%. The parent group of Engie has recently announced that it had given up the payment of dividends planned for 2019 and it had withdrawn its estimates on the financial results for this year, due to the coronavirus pandemic (COVID-19), which would significantly affect the operations and customers of the French energy and utility group. In 2019, Engie Romania distributed to shareholders total dividends of RON 136.77mln, accounting for 30% of the profit posted in the previous year, dividends from which the Romanian state collected over RON 50mln. In 2018, the net profit of Engie Romania was RON 455.92mln, up 35% compared to 2017, mainly as a result of an increase in gas prices, both on the regulated market of household consumers and thermal power plants producing heat for the population and on the competitive market. In the first month of this year, Engie was the largest gas importer in Romania, with a share of over 50%, through Engie Romania (45.69%) and Engie Energy Management Romania (4.69%). Besides Engie Romania, active mainly in gas supply, but also in electricity supply, the French group also controls in Romania Distrigaz Sud Retele (gas distribution), Engie Servicii SRL (services related to gas installations), Braila Winds SRL, Alizeu Eolian SA (renewable energy production) and Engie Building Solutions SRL (installation works and services for industrial customers).
Electrica to grant dividends of RON 246mln
The Ordinary General Meeting of Electrica Shareholders, which took place on April 29, 2020, approved, with the majority of votes expressed, the Board of Directors’ proposal regarding the distribution of the net profit related to the financial year of 2019. The total value of the gross dividends will amount to RON 246,108,017, the value of the gross dividend per share will be RON 0.7248 and the date of dividend payment – June 26, 2020. Shareholders also approved the revenue and expenditure budget related to the financial year of 2020 and the annual financial statements for the financial year ended December 31, 2019, both at consolidated level and at individual level. At the same time, the date of June 9, 2020 was set as Record Date, to identify shareholders subject to the OGMS of Electrica, including the right to benefit from dividends.
“In the exceptional circumstances generated by the Covid-19 pandemic, we continue to honor our commitments to both our customers and shareholders. The dividend distribution proposal reflects the company’s performance in 2019 and is in line with the dividend yield level with which we have accustomed our shareholders. Electrica remains one of the companies that investors still trust, despite the volatility of the capital market. During this difficult period, we have even noticed the consolidation of the positions of some institutional investors, who traditionally have a medium and long-term investment strategy, in line with the Group’s strategy. We constantly monitor the national and international context, as well as the financial performance and liquidity of the Group’s companies in order to limit any potential risks, and we are ready to respond, as soon as possible, to the situations generated by the evolution of the crisis,” stated Corina Popescu, CEO Electrica SA.
Dividend of RON 1.61/share at Romgaz
Romgaz management has submitted to shareholders a proposal for a gross dividend per share of RON 1.61, of which RON 1.39 related to the result posted in 2019 and RON 0.22 related to retained earnings. The gross dividend of RON 1.61/share will be granted taking into account the fact that: dividends due to shareholders, according to the proposal for the redistribution of the profit related to 2019, amount to RON 535,737,136; dividends due to shareholders, according to the proposal for the redistribution of the retained earnings, amount to RON 84,792,928; dividends are distributed to shareholding proportionally to their shareholding; the company’s share capital is RON 385,422,400, split into 385,422,400 ordinary, registered, indivisible shares, with a nominal value of RON 1/unit. The payment of dividends due to shareholders starts on July 24, 2020. The preliminary net profit of Romgaz for 2019 is RON 1.43bn, up 4.55% compared to 2018.
Transgaz to grant dividends worth RON 182.14mln
Shareholders of Transgaz, the operator of the national gas transmission system, approved the distribution of the amount of RON 182.14mln as dividends, the equivalent of 52% of last year’s profit, of RON 348.26mln, which means that the dividend per share is RON 15.47. Of the remaining amount, RON 166.11mln will enter the account of own financing sources, while the amount of RON 15.88mln will be distributed for employee participation in profits. The Record Date, which defines shareholders to benefit from dividends, is June 26, while payments will start on July 17 this year.
Dividends of RON 498.4mln at Nuclearelectrica
Nuclearelectrica shareholders approved the distribution of dividends of RON 498.4mln from last year’s profit. The total value of gross dividends is RON 498,421,396, the value of the gross dividend per share is RON 1.65306302, and the date of dividend payment is June 25, 2020. The state owns, through the Ministry of Economy, 82.49% stake in Nuclearelectrica, which reported a net profit of RON 540.9mln in 2019, up 31.7% compared to the previous year. Revenues from electricity sale amounted to RON 2,365,563,574 last year, by 11.7% higher than in 2018. The quantity of energy sold was 10,622,086 MWh, similar to that recorded in 2018.