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Romania: Transelectrica’s dividend proposal rejected

19.Jun 2021.

The Romanian Government said that Transelectrica failed to oblige the legal provisions related to the profit distribution by state-controlled companies. The Government, as the majority owner with 58.7 % stake in electricity transmission system operator Transelectrica, rejected the company’s financial report for 2020 and its dividend proposal and called for a new general shareholders’ meeting.

Transelectrica proposed total dividends worth 12.1 million euros, of which 8 million euros from its 2020 net profit and the rest from retained earnings from previous years. However, the total dividends represented less than 40 % of last year’s net profit, while state companies are required to distribute at least 50 % of their net profit to the shareholders. Therefore, the Government will ask for higher dividend payout. Also, Transelectrica’s proposal represented a yield of only 3 % based on the current share value, while other state-controlled energy companies (Nuclearelectrica, Romgaz and Electrica) offered a yield of above 5 %.

Transelectrica recorded a net profit in the amount of 23.3 million euros in 2020, which is by 18.3 % higher compared to the previous year. The increase in profit was mainly due to reduced operational expenses, including depreciation, as well as to an efficient management of available resources. Transelectrica’s total revenues dropped slightly by 1 % year-on-year to 486 million euros in 2020, mainly due to the decrease of the operational revenues associated to zero profit activities and also by diminished quantity of transported electricity. Total operating expenses increased by 8 % year-on- year to 199 million euros in 2020, while earnings before interest, taxes, depreciation, and amortization (EBITDA) rose by 11 % year-on-year to 89.5 million euros.