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 from the first six months of this year.
Shares rose 9.8 percent to 33.19 reais at the close of trading in Sao Paulo, the most since October 2008. It was the third-biggest gainer on the Ibovespa, which climbed 2.3 percent.
Copel will pay dividend and interest on capital of 325 million reais ($140 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. The announcement signals that “the 50 percent payout ratio could become the ‘new normal’ for Copel,” 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 for companies on the Ibovespa and 2.43 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.
The company has advanced 4.7 percent this year, which compares with an 6 percent decline for Brazil’s Electric Energy Index of 16 power utilities.
Copel won the biggest contract in a Brazilian auction for 3.6 billion reais of power lines with Furnas Centrais Eletricas SA, a unit of state-run power utility Eletrobras, electricity regulator Agencia Nacional de Energia Eletrica, said today on its website. The companies will be paid 174.4 million reais a year to build transmission lines and substations in the states of Sao Paulo and Parana after the assets start operations.
The contract may have benefited shares because the companies won the highest price available in the bid, Karina Freitas, an analyst at Sao Paulo-based brokerage firm Concordia SA CVMCC, said in a telephone interview.
Copel also won a smaller contract to build a transmission line and substation in Parana state, the power regulator said in a statement.
Eletrobras is officially known as Centrais Eletricas Brasileiras SA.