Cia. Paranaense de Energia, the Brazilian electricity distributor known as Copel, rallied the most in five years after saying it will pay a dividend equal to half its net income in the first six months of this year.
Shares rose 8.5 percent to 32.82 reais at 12:31 p.m. in Sao Paulo. A close at that level would be the biggest-one day gain since October 2008. It was the best performer on the Ibovespa stock benchmark, which climbed 1.6 percent.
Copel will pay dividend and interest on capital of 325 million reais ($139 million) to shareholders of record as of Nov. 26, according to a regulatory filing yesterday after markets closed. Holders of the class B preferred stock, which is typically the most-actively traded, will receive a payout of 1.25 reais per share, the company said.
The utility based in Curitiba, Brazil, was expected to maintain dividends no higher than 40 percent of net income, and the announcement signals that “the 50 percent payout ratio could become the ‘new normal’ for Copel” given its relatively low debt, Citigroup Inc. analysts including Marcelo Britto wrote in a note to clients.
The company’s ratio of debt to earnings before interest, taxes, depreciation and amortization in the past 12 months is 1.98, which compares with an average of 8.68 times for companies on the Ibovespa and 2.43 times for its global peers, according to data compiled by Bloomberg.
Copel has made two dividend distributions so far in 2013. The planned payout announced yesterday would bring this year’s total to 2.28 reais per preferred share, according to data compiled by Bloomberg.
Copel has advanced 3.5 percent this year, which compares with an 6.2 percent decline for Brazil’s Electric Energy Index of 16 power utilities.
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