Page 78 - RUSRptSept18

dividend flow, not capped to upside, in line with Severstal and MMK," VTB Capital argues. VTBC believes dividend yield of 12-15% (with upside potential) is sustainable, supported by strong diamond market fundamentals and a lack of capex-intensive growth projects in the medium term. The bank has a Buy recommendation on Alrosa with target price of RUB130 per share implying a 495 estimated total return.
Norilsk Nickel maintains high dividend yield payout at 7% with interim payment for the first half of 2018 of $11.37/share The Norilsk Nickel board recommended an interim dividend for the first half of 2018 of RUB776.02 per common share ($11.37) at a meeting on August 14. The record date was set for October 1. The interim dividend will amount to RUB122.802bn (1.8bn), which implies a yield of 7% - one of the highest yields on the Russian market. “Though we had initially forecast an interim dividend of around $1.2-1.5bn (for a 4.8-6.0% yield), we had warned of upside to that, given the company's strong the first half of 2018 financial results and the tax risks,” Irina Lapshina of Sberbank CIB said in a note.
Russian oil company Tatneft board recommended 6M18 interim dividends of RUB 30.27/share ($0.45) for both ordinary and preferred shares , which implies 4.0% and 6.0% interim dividend yields, the company said on 13 August. The total amount of dividend payout of RUB 70.4bn ($1.06bn) recommended for distribution corresponds to the free cash accumulated by the company as of the end of 1H18, according to the company. The preliminary record date for dividends is set for October 12. An extraordinary shareholders meeting is to decide on dividends on 28 September, with registration closing on 3 September. Dividends of RUB30.27 ($0.45) per share is a third (34%) higher than VTB Capital (VTBC) had expected, the bank said in a note. “The proposed dividends imply a 71% payout of the IFRS net income for 1H18, we estimate. This translates into interim dividend yields of 4.0% and 6.0% for ordinary and preferred shares, respectively. We calculate that under the current oil futures curve and respective RUBUSD the company might deliver healthy DYs of 7.5% and 11.1% on ords and prefs, respectively,” VTBC said.
Russian children's goods retailer Detsky Mir may recommend paying 100% of its net profit in dividends for 2018, the CEO of the company Vladimir Chirakhov said at the conference call on August 21 as cited by Reuters. This week Detsky Mir posted surprisingly strong second-quarter results , impressing the analysts with like-for-like sales growth, almost doubling online sales, tight cost control, and improved store opening guidance. "Detsky Mir's strong results for 2Q18 could lead to our and market outlook revision for 2018," BCS Global Markers commented on August 22, adding that "strong results also increase the likelihood of generous dividends." Currently Detsky Mir pays 50% of Russian Accounting Standard (RAS) net profit, but it paid 100% of RAS net profit for 2017 or RUB2.9bn. The main shareholder of Detsky Mir is the multi-industry investment conglomerate AFK Sistema .
78 RUSSIA Country Report September 2018 www.intellinews.com