ELMŰ-ÉMÁSZ chairman says Hungary's retail-power system no longer viable, talks with gov't needed

The chairman of the board of the electricity distributors ELMŰ and ÉMÁSZ said on Monday that the retail power system in Hungary is no longer viable and that talks are therefore needed between electricity companies operating in the country and the government. In response to assertions that energy companies operating in Hungary have generated excessive profit, ELMŰ-ÉMÁSZ Group board Chairman Dr Marie-Theres Thiell noted that the companies have invested HUF 450 billion in Hungary and have paid HUF 200 billion in dividends over the past 17 years. Dr Marie-Theres Thiell said that the ELMŰ-ÉMÁSZ does not expect to make profit at the group level in 2013 as a result of the increasing taxes the government has imposed on Hungary's energy sector. The boards of electricity distributors ELMŰ and ÉMÁSZ will propose paying dividends of HUF 1,700 and HUF 1,400 per share, respectively, at their April 25 annual general meetings, the companies announced on Monday. ELMŰ and ÉMÁSZ paid identical dividends last year. ELMŰ's proposed dividend of HUF 1,700 per share would result in total dividend payments of HUF 10.33 billion, compared to 2012 after-tax profit of HUF 8.37 billion. ELMŰ said that the company would therefore have to use HUF 1.96 billion in profit reserves to pay the proposed dividend. ÉMÁSZ's proposed dividend of HUF 1,400 per share would result in total dividend payments of HUF 4.271 billion, compared to 2012 after-tax profit of HUF 4.312 billion. ÉMÁSZ said that the company would place the remaining HUF 41 million in profit reserves. ELMŰ and ÉMÁSZ, both majority-owned by Germany's RWE-EnBW, are B-category issuers at the Budapest Stock Exchange.