Page 10 - FSUOGM Week 35 2022

FSUOGM PERFORMANCE FSUOGM

Sanction-defiant Gazprom to pay $20bn

in first ever interim dividend

RUSSIA RUSSIAN natural gas giant Gazprom saw its Gazprom's management's plans to pay
shares on Moscow Exchange jump by over 30% dividends could have been buoyed by record
Gazprom has bucked on August 31 on the announcement that the gas prices, according to Kommersant daily. In
the trend among company will pay RUB1.2 trillion ($19.6bn) as August the average gas price in Europe was 2.3-
Russian major firms by its first ever interim dividend for 1H22. fold higher than the average for the first half of
pressing ahead with an As followed closely by bne IntelliNews, Gaz- the year, promising Gazprom even higher profits.
interim dividend. prom and its European gas supplies have been on “Given the situation, we think the decision
the front line of Russia’s economic war with the to pay the company’s first-ever interim dividend
West since the beginning of the military invasion now, and to do with a dividend almost perfectly
of Ukraine. matching “the one that got away” on June 30, is
As the fallout from Russia’s military invasion about the best possible way management could
spread in 2Q22, a cascade of dividend cancella- have gone about addressing the impairment to
tions from Russia’s largest blue chips followed, Gazprom’s investment case,” BCS GM argues.
with that of gas giant Gazprom hurting local However, the analysts note that as the
investors the most. interim dividend almost matched what could be
But as the Russian economy seems to be expected from Gazprom for the entire 2022, and,
doing much better than expected under West- keeping in mind that it still has to pay RUB1.25
ern sanctions, corporate profits remained resil- trillion “special tax” on 3Q22 results, the final
ient in 2Q22. Gazprom, in an apparent display 2022 dividend will likely not be nearly as large as
of defiance, walked back its previous dividend the interim payout.
withdrawal and decided to pay RUB51/share for Nevertheless, Gazprom's interim payout
1H22 in its first interim payout on record. could encourage other listed majors to pay divi-
“Management’s decision to make Gazprom’s dends. Local investors could reinvest Gazprom's
first-ever interim dividend has caught us, and the payout back into the equity market, improving
market, by complete surprise. At RUB51/share its liquidity.
(19% dividend yield), the dividend’s size is very Notably, Gazprom shares started moving
significant, almost matching the cancelled 2021 up even prior to the official announcement of
dividend recommendation and easily break- the interim dividend payment, appreciating
ing the all-time record of RUB16.6/share set in by 6% on August 30. The Bell cited unnamed
2018,” BCS Global Markets commented. sources and Telegram trading channels as
In BCS GM’s view, this is “easily one of the claiming that this was a result of an "apparent
more positive shareholder events in the compa- insider trading" ahead of an anticipated jump
ny’s history”. in share price.
The CFO of Gazprom, Famil Sadygov, con- As followed by bne IntelliNews, prior to the
firmed that the payout will comply with the gov- military invasion of Ukraine, Russian equity
ernment-required 50% of adjusted net income market saw a massive inflow of local investors,
under IFRS for state-owned enterprises (SOE), but also the gamification of retail trading with
and that the management intends to stick to this makeshift strategies, co-ordination and unveri-
dividend policy going forward. fied “inside” information ripe on Telegram chan-
This is reassuring, as Gazprom’s 2021 divi- nels and other social media.
dend cancellation seemed to defy the Finance Now that the foreign investors are gone from
Ministry’s 50% payout rule for SOEs. Together Russian equity markets and liquidity is limited,
with an near-simultaneous imposition of a one- the share of domestic retail investors on Moscow
off tax levy on Gazprom, this “severely under- Exchange has soared from 40% to over 70%. In
mined investor confidence in both the dividend such conditions the Russian equity market is
policy and the company’s tax regime”, BCS GM poised to remain volatile and prone to specula-
analysts remind. tion. ™

P10 www. NEWSBASE .com Week 35 02•September•2022