Page 76 - bne IntelliNews Country Report: Russia Dec17

January–March 2017. Alexei Mordashov, chairman of the board of directors of Severstal, holds 79.2% in the company.
Russia's largest carmaker Avtovaz could pay its first dividend in almost a decade , AvtoVaz major shareholder, the head of state technology agency Rostec Sergei Chemezov, said on November 13, as cited by Tass. "Should we have the [operational] profit and shareholders decide to distribute it in dividends, of course a payout is possible," Chemezov said, while adding that "the money could also go on company's development." In the third quarter, a strong upturn in domestic sales supported AvtoVaz's results, with the company posting positive operating profits for the first time in a year and cementing its recovery. "The ongoing financial turnaround at AvtoVAZ is gaining momentum," VTB Capital commented on October 24, estimating that its Ebitda margin in the reporting quarter might have increased to about 9%. Car sales have put in eight straight months of growth and AvtoVaz’s cars are the top selling models in Russia at the moment.
Russian multi-industry investment conglomerate AFK Sistema will continue to be cut off from the dividends of shares blocked in the controversial legal battle with state oil major Rosneft, Interfax said on November 21, citing the decision of Moscow Arbitrage Court. In September the Eighteenth Arbitration Appeals Court in Chelyabinsk rejected an appeal by Sistema to unfreeze its holdings in major assets, including the stake in mobile major Mobile TeleSystems (MTS). Sistema estimates it has suffered a dividend loss of RUB17.5bn ($279mn) on the arrested assets, valued at RUB250bn (book value of RUB185bn). RUB16.5bn of that was to paid by MTS. In October Sistema management recommended to pay interim dividends for January-September 2017 despite the Rosneft turmoil. Sistema recommended paying RUB6.56bn ($114mn) or RUB13.6 per GDR, which translates into a 6% dividend yield. In 2016 the company paid RUB11.5bn in dividends.
Russian non-ferrous major Norilsk Nickel plans to cut dividends to the minimum threshold of $1bn , Vedomosti reported on November 20. The company cited the launch of large investment projects, including the $1.5bn Bystrinsky ore mining and processing plant, as the reason to reduce its dividends. At the moment, Norilsk Nickel's total investment stand at $2bn a year, but the figure is set to go up to $2.1bn in 2018 and $2.3bn by 2020.
Etalon’s Board of Directors has recommended a 1H17 dividend of $0.04/GDR . The record date is 17 November 2017. The announcement is the first recommendation under the recently updated dividend policy that assumes a 40-70% payout ratio from IFRS net income. For 1H17, the payout ratio stood at 58% and implied a dividend yield of 1%. VTB notes that the first half of the year is seasonally low, with the key transfers to clients and booking of revenues happening in the second half. VTB annualised forecast stands at a 5% dividend yield from 2017 net income. Etalon’s GDRs trade on P/NAV of 0.65x, offering a 15% discount to LSR and representing our preferred sector exposure.
Tatneft approved an interim dividend of RUB27.78/share , making it the best payer in the sector and reflecting a RAS payout ratio of 75% (implying 6.3% and 8.6% yields for common and preferred shares, respectively). The company noted in the press release that management will aim to maintain the same level of dividend payments for the full year. Rencap changed its 2017E IFRS dividend payout estimate to 65% (from 50%) and now expect a full-year dividend of RUB33.7/share – implying yields of 7.7% for commons and 10.4% for prefs – the highest in the sector.
76 RUSSIA Country Report December 2017 www.intellinews.com