Rise rating, continue investment and increase dividends. Stilwell’s objectives for EDP

The manager Miguel Stilwell d’Andrade is the new interim CEO of EDP. The temporary succession happened this Monday after António Mexia was suspended by the courts in the EDP case where he is accused of corruption. Just two weeks ago, Stilwell d’Andrade represented the electric company (then as CFO) and explained the objectives for the coming months: to raise the rating, continue the investment and (only afterwards) increase the dividend.

“It is well known that EDP has a very stable dividend policy,” he began by explaining in the June 25 edition of BiG e-Talks, a series of online conferences organized by BiG – Banco de Investimento Global. Stilwell d’Andrade said that many investors ask him when EDP will increase the dividend.

“The goal is to reach a BBB rating. We are in BBB-, so raise a notch to BBB. [Then] continue to execute the investment plan and then, when we have visibility on the growth of our net income, start to increase the dividend”, he said about the priorities. “It’s always a permanent balance among these three variables to ensure we can maximize shareholder value.

EDP has paid shareholders 0.19 euros per share in recent years – a total of 695 million euros – and this is the minimum ceiling until 2022, according to the strategic plan that the company presented to the market last year. It was also at this time that the company revised its strategy with a strong commitment to renewables: it plans to invest 12 billion euros, while divesting in non-core businesses.

“The great geographies from which the growth is coming are the USA and Brazil. In the future, eventually, more will come from Europe, but in 2020 clearly growth will come from the US and Brazil,” he said, adding that, in sectoral terms, “much of the growth is coming from renewables. The company expects to “almost triple the rate of growth of renewables.”