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Eastern Europe
March 8, 2019 www.intellinews.com I Page 16
As Lukoil's net debt shrank to a "negligible" $0.6bn as of the end of the 2018, Sberbank believes this should support an improvement in the dividend payout and could potentially lead to the launch of
a new buyback program. Both BCS and Sberbank are looking forward to the new dividend strategy being discussed this week, as well as possible buyback guidance and production outlook.
In September 2018 started the first stage of its $3bn share buyback running through the end of 2022. At the first stage, the company said it would acquire at least $1bn worth of its shares by the end of 2019.
In 2018 the capitalisation of Russia’s biggest pri- vately owned oil company on Moscow Exchange caught up with such state-controlled heavy- weights as Sberbank and Rosneft oil major, de- spite it having smaller reserves and lower output.
Lukoil’s new strategy, presented at an investors’ day in London in March 2018, was met positively by analysts and investors. The strategy outlined Lukoil's four key goals: organic extraction growth, optimising refining to maximise free cash flow, development of petrochemical segment, and
a progressive dividend policy.
In September 2018 Fitch Ratings affirmed Lukoil's long-term foreign- and local-currency Issuer Default Ratings (IDRs) at 'BBB+' with a Stable
outlook. A full list of rating actions is available at the end of this commentary.
"The rating affirmation reflects the company's strong integrated upstream and downstream operations, low cost production and solid credit metrics with funds from operations (FFO) adjusted net leverage comfortably below 1x," Fitch com- mented.
Lukoil’s shares have been an outperformer, as bne IntelliNews recently reported in the article “King
of the castle”. While the other heavy weight state- owned Russian blue chips have more or less been treading water due to sanctions risks, both Lukoil and independent gas producer Novatek have seen their stock price double in the last year. Both these companies now enjoy valuations on a par with the big boys of Russian hydrocarbons, despite having much small reserves and production volumes.
Russian children's chain Detsky Mir improves results and dividend in 4Q18
IntelliNews Pro
The iconic Russian children's goods chain Detsky Mir controlled by AFK Sistema multi-industry investment conglomerate posted 14% year-on-year growth in revenues in the 4Q18, supported by 89% y/y expansion of online sales that accounted for 8% of total top line.
Detsky Mir posted 18% y/y Ebitda growth in the reporting quarter, with 2018 Ebitda doubling year-on-year, however, partly attributed to the adoption of IFRS16 accounting standards.