Verbund AG (VER), the biggest utility in Austria, fell the most in five weeks in Vienna trading after forecasting lower operating profit for 2013, citing weaker power prices and stagnating demand in Europe.
The shares fell as much as 3.8 percent, the biggest intraday drop since Jan. 29, and declined 2.3 percent to 16 euros at 4:25 p.m. local time. More than 685,000 shares changed hands, triple the average volume over the past three months.
The power market has become “insecure and very challenging,” Chief Executive Officer Wolfgang Anzengruber told journalists in Vienna today. The company will probably make around 50 euros ($65) a megawatt-hour this year, compared with 52 euros in 2012, he said.
Verbund, which generates most of its 35,000 gigawatt-hour output from hydro plants in the Alps and along Austrian rivers, said it will focus on domestic and southern German hydropower and will restructure or sell assets it doesn’t deem to have strategic value. It agreed to swap its 50 percent stake in Turkey’s Enerjisa Enerji AS for EON SE’s stake in eight German hydropower plants in December.
If the deal is completed successfully, which Anzengruber sees happening “in the coming weeks,” the dividend will be raised from 60 cents to 1 euro per share, he said.
While the special dividend is a one-off, the earnings decline is here to stay, analysts at Deutsche Bank AG wrote in a note to clients. The bank suggests selling the stock.
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