Electrica (BVB: EL), one of the largest electricity distributors and suppliers in Romania, recently celebrated a decade since its dual listing on the Bucharest and London stock exchanges. Since listing, the company’s share price increased by 39.6% to RON 15.3 at the time of writing. However, the total return, including dividends, amounted to over 90%.
In July 2014, Electrica raised RON 1.95 billion (EUR 440 mln) in what was the biggest IPO Romania had seen until that moment. Electrica’s record was only broken by the Hidroelectrica IPO in July 2023.
In the years after the listing, Electrica’s stock price was negatively influenced by lower profitability due to changes in the local electricity market, hitting a low of RON 6.1 in September 2022. But in the last two years, the trend has reversed and the EL stock price has more than doubled and the market capitalization climbed to RON 5.2 bln (over EUR 1 bln). The year-to-date (YTD) performance is 32.75%, compared to the BET index, which recorded an 18.31% increase. Electrica was included in the FTSE Global All Cap and FTSE Global Mid Cap indices on March 19, 2024.
Electrica’s number of shareholders went up from 7,000 in 2014 to over 13,700 in 2024. The local pension funds in Pillar II and Pillar III together hold over 24% of the company’s shares, being the second largest shareholder after the Romanian state. The transactions with Electrica shares have totaled approximately RON 6.2 billion (of which approximately RON 4.62 billion lei post IPO transactions), thus representing 4.7% of the liquidity recorded in the last 10 years on the Main Market of the Bucharest Stock Exchange. The company has also attracted a diversified portfolio of international investors, contributing to Romania’s upgrade to the status of an Emerging Market by FTSE Russell.
On June 26, 2024, Electrica celebrated a decade since its listing in an event organized at one of its power stations in Bucharest, which took place under the slogan “Celebrating the Past. Crafting the Future” and was attended by figures involved in the listing of the company, such as former PM Victor Ponta, but also current energy minister Sebastian Burduja.
Giving the first speech of the event, the energy minister noted that the government is keen to encourage energy production in the country through new financial instruments. He also spoke of ongoing projects that the government hopes will lead to the creation of new successful companies.
Alexandru Chiriță, CEO of Electrica, said that the company is ready to face new challenges and transform them into opportunities. “This decade of achievements would not have been possible without the trust and support of our shareholders, strategic partners, clients, and especially our team, who work passionately to turn our vision into reality. We look forward with confidence and enthusiasm to the future, continuing to invest in innovative technologies and improve our services, to remain a cornerstone and a model of excellence in Romania’s energy sector,” Alexandru Chiriță stated.
In a recent interview for Investenergy.ro, Chiriță went more in depth regarding Electrica’s plans for the future. The company aims to fully digitize its network infrastructures, making use of AI to optimize operations. Electrica also plans for the extensive integration of renewable energy and storage solutions into its grids.
The president of the Romanian Senate and presidential hopeful Nicolae Ciuca also sent a video message to celebrate the decade that has passed, highlighting the importance of Electrica’s listing in 2014. Ciuca argued that the listing contributed to making Romania into an energy market. He also said that Electrica is stronger today, with over 13,700 investors and with a quarter of the shares held by pension funds, the largest institutional investors in Romania. Electrica is also the largest employer in the energy sector in the country, with around 8,000 employees.
Romanian prime minister and also presidential hopeful, Marcel Ciolacu, leader of the Social Democrats, also sent a written message to mark the event. According to the PM, Electrica ensured transactions of RON 4.6 billion on the stock market in the decade since its listing and has benefited from part of the EUR 13.6 billion invested through EU and national funds in the Romanian energy grid. He also said in the message that the return to a competitive energy market will be done in stages, starting in the spring of 2025. The Romanian government capped energy prices for consumers after Russia’s invasion of Ukraine and the subsequent skyrocketing of energy costs.
Representatives of Romania’s financial supervisory authority, ASF, said during the event that the listing of Electrica gave the company access to much-needed financing, allowing it to continuously invest in the Romanian energy sector.
Radu Hanga, Chairman of the Board of Bucharest Stock Exchange (BVB), also gave a speech, highlighting the fact that state-operated companies in Romania that are listed were valued at around RON 26 billion a decade ago and that now their capitalization reached around RON 110 billion, a fourfold increase.
Electrica’s listing remains the only privatization with a majority package through the stock exchange and the only listing in the Romanian state’s portfolio with a new stock issuance. Brokers and analysts argue that its dividend policy and strategic development initiatives remain attractive to investors. The dividends granted by Electrica over the 10 years since its listing have totaled over RON 2 billion (EUR 401.8 million) gross.
(Photo source: press release)
