In the last weeks, the quotations for utilities were animated by the decision that obliges the state companies to distribute at least 90% of last year’s profit as dividends (or payments), compared to a minimum of 50% valid until now, says Georgiana Androne, investment analyst at Tradeville.

“At least in the short term, the investors put aside the worries about lack of investment and unfavorable regulatory framework, attracted by the possibility of generous distributions. The annual financial results, published in the middle of this week, have allowed more accurate expectations”, says Androne

Thus, Transelectrica (TEL) suffered a 8.7% drop in operating income compared to 2015 due to reduced tariffs, while the amount of energy transported remained relatively constant. The operating profit decreased by 18.7%, exceeding, however, the budgeted level; the net profit dropped by 20.5%. According to the minimum distribution rate, required now by law, Transelectrica could pay a gross dividend of 3.50 lei/share, equivalent to a yield of 10.62% to the closing price from yesterday’s reference.

After modest results in the first nine months, Transgaz (TGN) managed a strong rebound in the last quarter, the cold weather increasing the gas consumption. Annually, the company registered an operating revenue increase of 12%, in which revenues from domestic transport increased by 8%. In turn, the operating profit and the net increases were 19.1% and 21.9%, the net income reaching a post-listing maximum. At a distribution rate of 90% to the shareholders, Transgaz could pay a gross dividend of 45.54 RON/share, equivalent to a yield of 12.65% to the closing price of yesterday’s reference.

At the same time, Electrica (EL) published only the preliminary individual results so far, less relevant for the operational panel. Instead of income from the supply and distribution of electricity, it reported income from dividends received from subsidiaries, as parent company – the difference between the two is an order of magnitude. In this context, information about the expenses or provisions related to the 2008-2010 period of last year are more difficult to integrate. The 2016 dividend will be paid from the consolidated profit therefore we expect more detailed results in order to make an estimate.

“Conpet (COTE) reported a decrease of 0.3% of operating revenue compared to 2015. The good evolution of the imports segment could not offset the domestic segment, which still represents 78% of total revenues”, reads the Tradeville analysis. Worryingly for the potential future growth, the quantity contracted by Lukoil reached last year at the maximum processing capacity of the refinery. The operating profit increased by 8% and 1.8% net. At a profit distribution rate of 95%, similar to last year, Conpet could offer a dividend of 7.06 RON/share, equivalent to a gross yield of 7.16% to the closing price of yesterday’s reference.

“We do not exclude the proposal of an exceptional dividend from the company’s cash reserves”, concluded Androne.