May 4, 2014 / 1:01 PM / in 4 years

Czech utility CEZ's dividend policy could change in future - PM

PRAGUE, May 4 (Reuters) - Czech Prime Minister Bohuslav Sobotka said on Sunday he could not rule out majority state-owned utility CEZ paying out a bigger portion of profit in dividends in the future.

The country’s most profitable company will continue for now with a dividend policy of paying out 50-60 percent of net profit and any change will depend on CEZ’s investment plans in the coming years, Sobotka added.

Central Europe’s biggest listed utility, CEZ has proposed paying shareholders a 40 crown-per-share dividend from 2013 profit, representing a total payout of 61 percent and unchanged from the year before.

Finance Minister Andrej Babis, whose ministry holds the state’s 70 percent stake in CEZ, has said CEZ could pay out all of last year’s net profit.

CEZ holds its annual shareholders’ meeting on June 27.

“As far as I know, CEZ will continue in its long-term dividend policy this year,” Sobotka said on a Sunday talk show on Czech Television.

“If this policy changes in the coming years after talks with shareholders, I again expect it will be some long-term view that CEZ will have in its dividend policy.”

CEZ cancelled a tender last month to build two new 1,200 MW units at its Temelin nuclear power station. The move followed a sharp fall in European power prices, and the government’s denial of price guarantees had made the $10-15 billion project uneconomical.

After scrapping the tender, CEZ may consider regional acquisitions, its chief executive has been quoted as saying.

CEZ dividends are an important source of revenue for the state budget. In February, CEZ forecast net profit before adjusting for minority interests to fall a fifth straight year to 27.5 billion crowns in 2014. (Reporting by Jason Hovet; editing by Andrew Roche)

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