(Repeats story published late on Monday)
By Jan Lopatka
PRAGUE, April 7 (Reuters) - The board of Czech power firm
CEZ <> will propose doubling its dividend, cancel
nearly 10 percent of shares and extend a buyback programme, the
company said on Monday.
The decisions are in line with previous announcements by
CEZ, which has been over-capitalised due to strong profits and
cashflow and a lack of acquisition opportunities.
"Overall, more than 21 billion crowns ($1.32 billion) is
earmarked for dividends," CEZ said in a statement. "The majority
owner, the state, will receive more than 15 billion."
CEZ, the largest central European company with a market
capitalisation of $45 billion, had earlier said it would raise
the dividend payout ratio to 50-60 percent of net profit,
excluding one-off gains, from 40-50 percent.
The electricity producer netted 42.76 billion crowns last
year.
CEZ said it would also propose an annual meeting on May 21
to cancel shares bought in an ongoing buyback. The cancellation
will not affect a small portion of shares earmarked for an
option scheme, the company said.
It has bought back 9.37 percent of its stock, with a limit
of 10 percent.
CEZ said the current capital structure further provided room
for a continuation of its expansion strategy, however planned
projects may not require cash for some time and it expected
growth in free cashflow.
Therefore, it would ask shareholders to approve a further
buyback of up to 10 percent.
"CEZ does not expect the second buyback programme will be
realised with such regularity as the first one," it said.
"Timing and size of the buyback will be given by development
on the financial markets, regular updating of a cashflow
forecast, the time breakdown of investment opportunities and the
needs of CEZ and legal regulations."
CSFB analyst Christopher Kuplent said the dividend was
slightly higher than his expectation of 37.50 crowns, but the
main positive news was an extension of the buyback.
"The big risk and the threat on the share price was always
that the government would continue to sell its stake into the
market," he said.
"I think last year's share buyback programme was successful
in counteracting that threat and I think it will be important to
do so this year."
The government has been slowly selling a 7 percent stake in
CEZ on the market. It has sold 2.35 percent since last August
when it began the process.
CEZ shares rose 0.58 percent to close at 1,220 crowns ahead
of the news on Monday, trailing the main PX <> index which
gained 1.26 percent.
(Additional reporting by Jan Korselt; Editing by David Hulmes)
