Page 88 - RusRPTDec20

outlook by some 10%. For 9mo20, the interim dividends are RUB20bn, broadly matching FCF and implying a 55% of net income payout (based on IAS17) for the period. The dividend yield is 2.7% for 9mo20, with a record day on 18 December. The company mentioned a dividend capacity for FY20 of RUB50bn, which was slightly ahead of the previous guidance of at least 50% y/y higher dividends (i.e. RUB45bn). We see a more uniform dividend distribution as being favourable to the company’s investment case, while the annualised yield of 6.7% and a 2021F EV/EBITDA of 6.3x, represent fair valuations to us. The amended dividend policy introduces semi-annual payments after the nine-month and annual results while making the base cash flow generation and leverage below 2x. The previous minimum payout, 25% of IFRS net income, was eliminated. For 9mo20, the interim dividend is RUB20bn, or RUB73.645/GDR. The figure was slightly higher than the RUB19bn FCF for the period, representing 55% of net income based on IAS17, or a 2.7% yield. The company estimates FY20 dividend capacity at RUB50bn, which would be 100% of our net income forecast and would compare with our RUB30bn FCF for the year. This would imply a 6.7% annualised yield. X5 Retail Group’s strong operational results and cash generation in 2020 mean that we model the company to deleverage from 1.7x net debt/EBITDA as of YE19 to 1.4x by December. We see an opportunity for higher leverage within the allowed threshold of 2x and growing dividends in future periods, in line with management’s comments.
Magnit​ announced higher-than-expected dividends for 9M20 (+67% y/y). X5 introduced changes to its dividend policy, announced its first 9M20 interim dividend and raised expectations for the FY20 dividend. Magnit announced yesterday, 18 November, that its BoD had recommended paying out c. RUB25bn in 9M20 dividends at RUB245.31/share. The record date is set for 8 January 2021. The dividend amount suggests a yield of c. 4.9% and a payout of 94% of the retailer’s 9M20 net income (based on IAS 17). At the same time, X5’s supervisory board approved several changes to its dividend policy: The retailer will introduce semi-annual dividend payments. The updated dividend policy will use cash flow as the basis for calculating dividends while maintaining a ND/EBITDA of less than 2.0x (based on IAS 17). X5 will pay out RUB20bn for its first 9M20 interim dividend for a DPS of RUB73.645/GDR, implying a yield of c. 2.7%. The record date is set for 18 December. The dividend amount represents a payout of c. 55% of the retailer’s 9M20 net income (based on IAS 17). X5 also noted that it does not plan to deleverage significantly at this point. As a reminder, the retailer’s ND/EBITDA stood at 1.5x as of 9M20. Importantly, X5’s management increased its estimated total dividend capacity for FY20 from RUB45bn to up to RUB50bn. This suggests that X5 could pay out up to RUB30bn in 4Q20 dividends, or c. RUB110.5/share, with a total yield of around 6.8% (including the interim dividend).
● Metal & Mining
Norilsk Nickel​ BoD recommended dividends of RUB623.35/sh for 9M20. According to the company’s press release, the total amount of funds to be allocated for the payment of dividends is RUB98.64bn ($c1.2bn). The BoD has recommended for EGM approval an interim dividend for 9M20 of RUB623.35 per ordinary share (c$7.74/share). The EGM date was set for 10 December
88 ​RUSSIA Country Report​ December 2020 www.intellinews.com