Coal-fired power stations will reduce EDP’s profit by 200 million euros
The company led by António Mexia is worried about the acceleration of the energy transition process of coal-fired power stations in the Iberian Peninsula.
As the deadline pointed out by Mexia approaches, in the last days, investors have incorporated the business in the stock prices. EDP has significantly increased its value in the last sessions and trades at its highest value since June 2008. After the announcement to the CMVM, the electric company has valued 0.6% to 3.80 euros per share.
“The competitiveness of these assets is penalised by the increase in the price of CO2 emission licenses, the reduction in gas prices, and the prospect of an acceleration in the growth of installed renewable energy capacity,” announced EDP in a statement to the Securities Market Commission (CMVM).
The company foresees “the maintenance of a high tax burden on these assets, as well as a political will to anticipate the deadlines for closing these plants”.
Thus, the company explains that incorporating this scenario in the annual impairment tests results in an extraordinary cost of 300 million euros in 2019, corresponding to a negative impact of 200 million on net profit. Between January and September, EDP profited 460 million euros, with the company’s guidance expecting profits to reach 800 million euros this year.
“The final impact needs approval by the external auditors,” he says. “This extraordinary accounting cost, being neutral in terms of 2019 cash flow and net debt, will have no impact on the dividend policy announced in March 2019, which set the minimum annual dividend amount for the 2019-2022 period at 0.19 euros per share,” he adds.
