New law could boost Émász profits as much as 40%
Friday, August 4, 2006, 16:42
A new law in force from August 1 which reallocates network transfer fees electricity distributors pay based on a mechanism devised by the Ministry of Economy and Transport could mean an extra Ft 1.8 billion in profits for Émász Rt, the electricity distributor for northern Hungary, according to an analysis by Raiffeisen quoted in online market news site tozsdeforum.hu. The additional profits would put earnings 40% over an earlier estimate by analysts.
Under the new law, electricity distributors are required to pay their network transfer fees into a central fund. This year, Raiffeisen estimates these companies will pay a combined Ft 16.6 billion into the fund. The money is then redistributed to the companies according to the ministry's special calculation. While the new law is a windfall for Émász and other peers, such as Titász Rt and Dédász Rt, it will probably translate as fewer profits for Elmü Rt, the electricity distributor for Budapest, and Édász.