Transelectrica and Transgaz to offer 50% of their profit as dividends

The yield of Transgaz dividends is 4.4 percent, representing a moderate gain for investors, while Transelectrica’s dividend yield was practically insignificant, at only 1.4 percent of the last reported Stock Exchange price. Transgaz shares were quoted at the end of last week on the Bucharest Stock Exchange at RON 217.5/per share, while those of Transelectrica were worth RON 26.5/per share.

The national natural gas transport company Transgaz will offer dividends worth a total RON 113.7 million (€30.6 mln), or 50.7 percent of last year’s net profit of RON 224.3 mln (€67.2 mln), down 5.7 percent year-on-year. The electricity transport company Transelectrica intends to distribute 52.5 percent of its 2007 profit of RON 50.3 mln (€15 mln) in the form of dividends, or over five-fold less than earnings the year before, mainly due to financial activity losses.

At the end of last week, Transelectrica also reported consolidated results, together with its branches, reporting gross consolidated profit for the company worth RON 90.6 mln (€27.1 mln), 20 percent higher than individual profit. Compared to consolidated profit in 2006, Transelectrica’s result last year was some four times lower.

Both utility companies have budgeted profit upwards for 2008, with Transelectrica estimating gross earnings 18 percent higher than last year, at RON 90 mln, and Transgaz management forecasting a 20 percent increase, to RON 269.2 mln, although they have indicated that this could be even higher, due to the fact that this was calculated on the basis of average exchange rates of RON 2.24/$1 and RON 3.28/€1, and a major portion of its profits coming from foreign currency contracts.