Page 87 - RusRPTApr20

“In the case of Russian state companies, management has historically provided the most reliable and accurate guidance on both its intent and potential dividend size. We believe investors should shift back to this mode and rely on management guidance in the current, highly uncertain environment,” Tikhomirov added.
● Oil & gas
Novatek BoD recommends 2H19 divis of Rb18.1/sh, FY19 of Rb32.33/sh. NOVATEK distributes no less than 30% of adjusted net income under IFRS, according to its dividend policy. Proposed 2H19 DPS of Rub18.1/sh implies dividend yield of 2.3%, as of last Friday’s close. The AGM will take place on 24 April.
● Banks
Sberbank Supervisory Board has voted through a record high dividend payment for 2019 of RUB422.38bn, or 50% of IFRS net profit and a dividend per share (DPS) payment of RUB18.7, reports BCS GM. The ex-dividend date is 14 May, with the AGM on 24 April. Separately, CEO German Gref provided a stress case with oil $20/bbl and the ruble weakening to 100 – Sberbank would remain profitable. He added that RUB3 trillion of liquidity could be easily attracted if needed.
● Real Estate
On 26 March, LSR’s Board of Directors announced a FY19 dividend of RUB3.1bn, implying a 5% yield and 42% payout ratio. The record date is 12 May 2020. In addition, the share buyback programme was announced at RUB5bn, but without any further details. The total amount represents some 9% of the company’s capitalisation and 20% of the free float Together, the RUB8bn broadly matches last year dividend and highlights to us the company’s robust commitment to shareholder return, taking into the account the current operating conditions. LSR’s shares are down 40% YTD vs. the 20% correction in the MOEX index, which reflects the hit to sentiment on equities both globally and in Russia. The stock trades on P/NAV of 0.3x vs. 0.7x of PIK and 0.2x of Etalon.
8.3.3 ECM news
BCS Global Markets raised the 12-month target price of RusHydro to RUB0.81 per share, implying an excess return of 10%, while affirming the Buy call on the name due to adding of the new production capacities and anticipation of restructuring of the Far East assets, the analysts wrote on March 2. As reported by bne IntelliNews, Russian utility majors are in focus as the sector is set to continue to rally in 2020. Analysts argued there is more place for upside for certain names coming from expected profitability gains, while the sector is fundamentally resilient to the growing Coronavirus panic, despite the recent fall in prices after markets collapsed on February 28. RusHydro was helped by warm weather in the beginning of 2020, and brought the biggest share price gain in the sector. The company added 835 MW or 2% of total capacities for 2H19, with the key launch being the 346MW Zaramagskie-1 HPP (ZHPP) with a new 15 years contract allocated to the plant. BCS GM sees ZHPP as the key driver for the company’s financials, adding up to RUB8bn to Ebitda and RUB6.4bn to net profit per annum or 8% and 20%, respectively. The on-going speculations that RusHydro could restructure its Far East assets (under RAO Far East) was taken positively by the market, BCS GM reminds. But the analysts still see it as unlikely and carrying greater risks than economic benefits.
87 RUSSIA Country Report April 2020 www.intellinews.com