March 14, 2018 / 8:35 AM / 3 months ago

Verbund increases dividend by 45 pct despite drop in core profit

VIENNA, March 14 (Reuters) - Austrian energy group Verbund said on Wednesday it would propose a 45 percent increase in its dividend for 2017 as it attributed a double-digit drop in last year’s core profit to one-off factors.

It said its 2017 adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) fell 11.7 percent to 922 million euros ($1.1 billion), largely due to non-recurring write-offs and a stake sale in its electric vehicle charging company Smatrics.

The hydropower specialist said it expects its EBITDA to decline 8 percent this year to 850 million euros.

However, it also said it had reduced its debt and that along with improving underlying operating results would enable it to increase its dividend payment for 2017, proposing a payout of 0.42 euro per share.

Like many of its rivals, Verbund is facing a slump in power prices and regulatory challenges, including European regulators’ decision to split up a joint power zone with Germany from October.

In response, Verbund is moving into new business areas. It plans to build up a comprehensive charging infrastructure for electric cars in Austria, with petrol station group OMV involved in the project after it bought a stake in Smatrics.

Verbund said it plans to pay 40-45 percent of its 2018 adjusted group result to its shareholders after a payout ratio of 48.4 percent.

$1 = 0.8069 euros Reporting by Kirsti Knolle; Editing by Susan Fenton

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