Hidroelectrica Hits RON 220, Nearing RON 99B Market Cap — NRG-IA

Hidroelectrica closed the July 3 trading session at RON 220 per share, up 6.02%, marking a new all-time high for the company. This surge pushed the issuer's market capitalization close to RON 99 billion and contributed decisively to the performance of the BET-NG energy index, while the blue-chip BET index hit a new record of 34,099.45 points. The RON 100 billion threshold is now within arm's reach. At the current capitalization level, a further gain of just over 1% would be enough for the market to award Hidroelectrica a triple-digit billion valuation. Market capitalization does not represent cash in the company's bank accounts, but rather the value investors place on all outstanding shares, based on current earnings, dividends, assets, and growth prospects. Friday's rally cannot be attributed to a single factor. The Romanian stock market enjoyed a strong session, with equity turnover reaching nearly RON 175 million, and the BET index closing up for the fifth consecutive session. Hidroelectrica recorded trades of nearly RON 27.84 million, though the day's highest volume was registered by Banca Transilvania. While the market bought into several narratives, H2O was the stock that provided the strongest boost to the energy index. A stock market record following a game-changing quarter First-quarter results for 2026 explain why Hidroelectrica has returned to the spotlight for investors. The group reported consolidated revenues of RON 3.129 billion, up 67% compared to Q1 last year, and a net profit of RON 1.307 billion, a 122% increase. EBITDA rose to RON 1.707 billion, while the net margin reached 42%. The primary driver of this recovery was hydropower generation. Hidroelectrica generated a net 3,608 GWh in the first three months of the year, 36% above Q1 2025 levels, with net hydro production rising 37% to 3,531 GWh. Total energy sold climbed 40% to 3,966 GWh. The company attributed this performance to improved hydrological conditions, including the Danube's flow returning to normal levels of approximately 6,900 cubic meters per second. This contrast with last year matters far more than a single session's percentage gain. In 2025, Hidroelectrica saw consolidated revenues rise by 5%, but net profit fell by 20% to RON 3.303 billion. Power generation was 14% below 2024 levels, with the company pointing to unfavorable hydrological conditions and prolonged drought as the main factors limiting energy available for sale. Q1 2026 demonstrates that Hidroelectrica's competitive advantage remains directly tied to water. When hydrological conditions improve, the company has more low-cost energy at its disposal, which it can monetize on the wholesale market, through bilateral contracts, and via its own supply portfolio. When water is scarce, the company must purchase more power to cover its commercial commitments, putting pressure on margins. Consequently, the market cannot simply annualize the Q1 net profit of RON 1.307 billion. While Q1 was strong, Hidroelectrica remains highly sensitive to hydrology, power market prices, and the ratio between its own generation and energy purchased to cover its supply business. The dividend remains a key argument, but should not be confused with future earnings Hidroelectrica also boasts a financial argument that continues to attract investors: substantial cash distributions to shareholders. For the 2025 financial year, the company distributed a gross base dividend of RON 7.348365 per share, paid on June 25, 2026. Separately, in late May, shareholders approved a gross special dividend of RON 2.223197 per share, scheduled for payment on September 30, 2026. This brings the total approved dividends for 2025 to RON 9.571562 per share. At a share price of RON 220, calculating the yield based on the entire 2025 distribution would suggest a gross yield of approximately 4.35%. However, this comparison requires careful interpretation. The base dividend already had its record date in early June and was paid prior to the July 3 trading session. For an investor purchasing the stock after this date, the remaining financial event is the special dividend, not the full RON 9.57 per share distribution. More importantly, the special dividend does not stem from earnings generated in 2026. It represents a distribution of RON 1 billion from retained earnings, specifically from the surplus realized from revaluation reserves. Hidroelectrica reported a cumulative dividend payout ratio of 130% for 2025, following a 100% payout ratio for the base dividend. The special dividend confirms the company's capacity to distribute cash, but it should not be treated as recurring operating income or as an automatic benchmark for subsequent years. While the market may appreciate the shareholder remuneration policy, a valuation approaching RON 100 billion requires more than just the expectation of another exceptional dividend. Hidroelectrica is no longer valued solely as a hydro generator The company's most significant…