Hidroelectrica sends the entire profit to the shareholders: Zero lei for investments, billions to the state budget

Hidroelectrica continues the policy of aggressive distribution of profit, directing almost entirely the gain to dividends, according to a note published on Thursday on the company's website. As in previous years, from the net profit of approximately 3.3 billion lei (673 million euros) obtained last year, no money will be withheld for the development of the company.

For several years, the company's entire profit has been used to feed the budget revenues, through dividends, under the conditions that the state, through the Ministry of Energy, is the majority shareholder, holding 80% of the shares.

The state collects half a billion euros

The company recorded a net profit of approximately 3.3 billion lei in 2025, down by approximately 20% compared to the previous year, against the backdrop of unfavorable hydrological conditions, according to the company's annual report.

However, the shareholder remuneration policy and the company continue to function as a vehicle for distributing liquidity to shareholders, especially the state.

Of the approximately 3.3 billion lei distributed, the state collects over 2.6 billion lei (around 520 million euros), dividends being a tool for covering the budget deficit.

Half a century old equipment in a strategic sector

Given that the company's investments are not supported by current profits, Hidroelectrica finances the projects from operational cash flows or uses reserves accumulated in previous years. On the other hand, there were years, such as 2024, in which they also distributed in the form of dividends, including from reserves.

This, in the context where the need for investment is high, as shown in the company's 2025 annual report.

The degree of wear and tear of the production capacities is high, according to the data in the report. Most of the hydro aggregates, about 61%, are between 20 and 50 years old after being put into operation. Only 15% were commissioned or refurbished after 2006.

Hidroelectrica claims that the investment program for 2025 was carried out in proportion to 95% compared to the allocated budget. More precisely, the investments were 781 million lei (156 million euros) in 2025, increasing by 32% when only 61% of what was budgeted was fulfilled.

Of this money, about 121 million lei (25 million euros) went to photovoltaic energy and energy storage projects.

Distributing profit in the form of dividends and limiting investment is an older policy of the Government. For many years, the Executive has been asking state-owned companies, through annual memorandums, to contribute to covering budget holes with their profits, distributing at least 90% in the form of dividends. This, given that the legislation provides for a minimum of 50% in the case of state companies.