Latvenergo, a leading energy company in Latvia, has announced its intention to reduce the share of its profits distributed as dividends to 35%. CEO Māris Čakste shared this information during a recent broadcast on Latvijas Radio, emphasizing the financial necessity behind this decision. He hopes that an agreement will be reached to normalize dividend levels at least by 2029, a reflection of the ongoing energy transformation within the company.

Čakste pointed out that the energy sector's transition requires significant investments. He highlighted that without adequate reinvestment, Latvenergo risks losing market share to competitors such as Lithuania's Ignitis and Estonia's Enefit, which are also undergoing their own transformations. The statement underscores the competition in the Baltic energy market and the financial implications of not adapting to changing conditions in energy production and distribution.

The CEO compared Latvenergo's intentions with those of other energy companies in Europe, where average dividend payouts typically range from 30% to 35% of profits. In contrast, he mentioned that Enefit pays almost no dividends, while Ignitis has also reduced its dividend distributions. This scenario illustrates the broader trend in the energy industry where companies must balance between providing returns to shareholders and investing in future sustainability.