Page 73 - bne IntelliNews Russia Country report May 2017

The board of Moscow City Telephone Network (MGTS) recommended to pay a record high RUB22.2bn (€0.35bn) in dividends for 2016, up from RUB21bn from the previous annual payout, exceeding the net profit by 75%. On announcement of the record-high dividends the preferred shares of MGTS jumped 40% on the Moscow Exchange, with the capitalisation peaking at RUB118.4bn. Most of the dividends or about RUB21bn will be received by mobile major MTS and its shareholder AFK Sistema multi-industry investment conglomerate, together controlling about 95% of charter capital of MGTS. Analysts surveyed by Vedomosti daily on May 15 believe that MGTS will remain a cash cow for the shareholders, paying about RUB15-18bn annually in dividends.
NLMK board recommends rub2.35/share 1Q17 dividend. The interim dividend yields 2.2% (below Severstal's which is above 3% for the same period);14 June is the recommended record date. The total payout should amount to approximately $250mn, which is slightly below ATON's $300mn expectation. Still, the dividend is above that stipulated by the dividend policy (50% of net income of $323mn, or of free cash flow of $208mn if the net debt to EBITDA ratio remains below 1.0x) and we deem it NEUTRAL overall.
Norilsk Nickel board recommends RUB446.1/share 2016 dividend. The final dividend yields 5.0%, with 23 June recommended as the record date. The total payout should amount to RUB70.6bn (around $1.2bn - on top of the $1.2bn paid out as an interim 9M16 dividend, $2.4bn in total). The dividend is in line with the company's dividend policy which requires that Norilsk pay out 60% of EBITDA ($3.9bn for 2016) as dividends if the net leverage ratio is below 1.8x.
TMK board recommends rub1.96 2016 dividend. The final dividend yields 2.6%; 20 June is recommended as the record date. The total payout should amount to RUB2bn (around $35mn). TMK's dividend policy requires the company to pay out at least 25% of IFRS net income, and the final dividend is approximately 42% of the 4Q16 net income. We think TMK needs to achieve a balance between deleveraging and distributing cash to shareholders.
Real estate developer Etalon’s Board of Directors has recommended 2H16 dividends of $0.107/share, with the record day on 4 August. The recommendation implies a 50% payout ratio and is in line with the upper boundary of the dividend policy and recent comments from the key shareholder. Bankers anticipate dividends remaining an important feature for the investment case and factor in a 50% payout ratio as sustainable. Etalon’s GDRs trade on a P/NAV multiple of 0.6x, a 30% discount to LSR’s GDRs and are our preferred exposure in the sector.
Magnit’s Board of Directors has recommended a FY16 dividend of RUB 67.4/share , with the record day set as 23 June. The final dividend recommendation implies an 0.8% yield. The dividend amount from 2016 net income reached RUB 278/share, which is 7% below our forecast and implies a total yield of 2.8%, based on the prices on the days of the BoD’s recommendations. Dividends are an important part of the company’s investment case and see a 50% payout ratio as sustainable.
Enel Russia's board of directors has recommended paying out a dividend of RUB0.06822/share on 2016 earnings. The recommended dividend is completely in line with the expected level, and corresponds with a 55% payout ratio (the company changed its 40% payout policy, and now eyes increasing the payout to 60% in 2018, and to 65% in 2019). The 2016 dividend
73 RUSSIA Country Report May 2017 www.intellinews.com