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Émász shares rise as profit doubles

Shares of Émász Nyrt, a Hungarian power distributor majority-owned by Germany's RWE AG, rose to their all-time high on Friday after the company said the country's new regulations on network fees will boost its profit. The shares rose 10% to Ft 15,750 in Budapest, the highest since the company listed on the bourse eight years ago. They added 48.4% this year, valuing at Ft 48 billion ($228.4 million). The benchmark BUX index gained 1%. Émász, based in Miskolc in northeast Hungary, said in a statement late on Thursday pretax profit this year will probably rise after regulations affecting the fees it pays to use the country's grid were modified as of Aug. 1. The new rules require state-owned grid operator Mavir Zrt to redistribute some of the fees it charges the country's six power suppliers for using the network. „Suppliers' fees were nearly doubled, giving Mavir an extra income,” said Zsófia Németh, an analyst with Concorde Securities said in Budapest. „This income will be redistributed among the suppliers.” Émász 's estimated net profit may increase by 31.6% to Ft 5.7 billion ($26.7 million) this year as network fees the company will pay to Mavir are less than the sum it will receive from the grid operator, Németh said, citing Concorde's calculations. The company may double profits next year, should current fees remain unchanged, she added. Hungary will redistribute some of the income from network fees to compensate power suppliers, such as Émász, which are losing money because the country's uniform power tariffs don't cover their distribution and network development costs. (Bloomberg)