Spanish energy company Endesa said on Monday it plans to protect its dividend payout from the impact of a court order to pay $570 million following a price review of a long-term liquefied natural gas (LNG) supply contract.
Endesa, owned by Italian energy giant Enel, said in a statement that its board of directors would meet in two days to tweak the dividend policy and keep shareholder pay unchanged for this year.
The decision kicks off a key week for the energy company, which will present its strategic update to the market on Thursday, a day after parent company Enel presents its own plan.
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The Spanish company said Monday it will have to pay $570 million to an undisclosed LNG producer following a ruling by the International Chamber of Commerce’s International Court of Arbitration in a dispute over a retroactive price adjustment. Endesa said it will record a charge for this amount in its results.
The court decision refers to the larger of the two LNG cases that the company has previously disclosed. The opposing party was seeking about $1.28 billion, a company spokesperson said.
Endesa, which still faces another claim of almost $600 million, has promised shareholders a dividend of 1 euro ($1.09) per share this year, pledging to raise it to 1.2 euros next year and 1 .4 euros in 2025. This corresponds to 70% of its adjusted profit.
Endesa shares fell 1.17% early in the afternoon in Madrid, while the general index rose 0.7%.
“This news shows that 2023 is not the best year for Endesa gas,” RBC analysts said in an analysis published Monday.
“Even if this doesn’t have an impact on 2023 dividends, it will have an impact on your bottom line and the company’s cash flows.”
(1 dollar = 0.9168 euros)
With information from Reuters