Page 74 - bne IntelliNews Russia Country report May 2017

suggests a 6.9% dividend yield, which renders Enel Russia one of the most attractive dividend stories among Russian power generators this year.
Rusal may change its dividend policy. According to Vedomosti citing unnamed sources related to the aluminium producer, the company may change the method it uses to calculate the net debt to EBITDA ratio for dividend paying purposes. Reportedly, the market value of 27.8% in Norilsk could now be subtracted from the calculated covenant net debt, which should push the covenant net leverage ratio from 3.2x (end-1Q17) to close to 1.0x, and allow the company to pay higher dividends. According to the current agreement with creditors, the company is allowed to pay dividends if the net leverage ratio is below 3.0x.Rusal's financial outlook has improved on expected aluminium capacity cuts in China, which should help to keep the market in deficit in 2017. Leverage remains substantial and, we believe, the company has to balance deleveraging and paying dividends to shareholders. We view the news on its potentially more flexible dividend policy as mildly positive.
OGK-2 might pay 25% of RAS net income in dividends for FY16.
Mosenergo could pay 30% of RAS profit for FY16. the Boards of Directors of Mosenergo and OGK-2 recommended dividends of RUB 0.08/share (4% DY, 30% of RAS) and RUB 0.008/share (2% DY, 25% of RAS), respectively. The dividend payments of 25% of RAS and 30% of RAS and are in line with the gencos’ dividend policies, according to which the companies could pay 5-35% of RAS net income to shareholders. The record dates were set as 14 June for Mosenergo and 20 June for OGK-2. Gazprom Energoholding’s CEO Denis Fedorov commented to Interfax earlier that a 35% of IFRS payout was also possible, with the final decision dependent on the position of Gazprom.
Surgutneftegas BoD recommends dividends of RUB 0.6/share for both ords and prefs; DYs of 2.1% and 1.9%, respectively which is in line with expectations . Next year DY might exceed 10% subject to RUB dynamics say bankers. The Board of Directors of Surgutneftegas has recommended that shareholders approve dividends for 2016 of RUB 0.6/share for both ordinary and preferred shares, according to a company press release. The record date for dividends has been set as 19 July. The annual shareholders meeting is scheduled for 29 June, with registration closing on 4 June. The recommended dividend payments of RUB 0.6/share for ords and prefs are in line with our expectations, as the company decided to pay symbolic dividends to owners of preferred shares in order to maintain their non-voting status, despite reporting negative net income for 2016. We calculate that the recommended dividends imply dividend yields of 2.1% and 1.9% for ords and prefs, respectively. In 2017, bankers expect the dividends for prefs to rise to RUB 3.7/share on the back of the company’s net income recovery, supported by the rouble depreciation, and translate into an attractive dividend yield of 11.8%. However, we note that the actual dividend payment for 2017 might differ considerably as the company’s earnings depend significantly on FX moves, which are unpredictable.
LSR BoD recommends dividend of RUB 78/share – flat YoY – 8.8% yield – record day on 20 June. LSR’s Board of Directors has recommended a FY16 dividend of RUB 78/share, with the record date on 20 June. The recommendation is in line with the previous guidance from the company and implies a flat amount for the third consecutive year. In 2016, LSR’s cash flow remained under pressure, with negative net operating cash flow of RUB 6.2bn as flagship projects were still at the ramp-up stage. For this year, management expects a positive performance, as residential pre-sales are seen advancing 13% YoY to 770,000sqm. LSR’s GDRs demand a P/NAV multiple of 0.9x and we consider the valuations as fair.
Phosagro board recommends RUB21/share dividend. The recommendation for GDRs is RUB7, implying a total payout of RUB2.7bn from
74 RUSSIA Country Report May 2017 www.intellinews.com