Page 60 - RusRPTJune18

the appointment of [the Finance Minister] Anton Siluanov as First Deputy Prime Minister increases chance of broader adoption of a 50% payout principle in the upcoming years," VTB commented.
Sanctioned Russian aluminium major Rusal of oligarchs Oleg Deripaska could be cut out of the dividends from Norilsk Nickel metals major in which Rusal holds 27.8%, the Financial Times reported citing unnamed sources in the company. While the US Treasury Department (USTD) does not directly prohibit receiving dividends, paying the dividend could be qualified as secondary transaction that would be covered and punishable.
Russian electric grid major Rosseti (Russian Grid) could increase the dividends for the first quarter of 2018 , Kommersant daily reported on May 28 citing a memo of state property agency Rosimushestvo. Rosseti could pay RUB2.46bn ($40mn) in dividends for the first quarter of 2018, or about 11% of quarterly RAS profit. This would not improve the dividend yield of the company dramatically, making it 1.5% for ordinary shares and 2.8% for preferred shares. In a separate report on May 26 Tass said that state technology corporation Rostec expects to get up to 30% in Rosseti through an additional issue of shares. "As for the signed agreement with Rosseti on joint work on the network digitalization project, the share might be lower than 30%," the head of Rostec Sergei Chemezov is quoted as saying. He added that expanding the share capital of the utility major and setting up "several joint ventures" would "make it possible to increase the efficiency of electricity consumption and avoid 20-25% of losses."
The management of leading Russian mobile phone MegaFon recommended the company doesn't pay any dividends fro 2017 to save cash for investment and costs related to the Yarovaya law data storage law, the company said on May 16. The board of directors already waived dividends in March, which was unexpected for investors and triggered a sell off in the London-listed stock at the time. The price of Megafon's shares fell moderately on the Moscow Stock Exchange on the news, down 0.2% by 10:30 on the news, Vedomosti reported. At the end of 2017, the operator decided not to pay interim dividends, but at the time was still expected to pay annual dividends. Megafon previously adopted a dividend policy in May 2017 to distribute 70% of the free cash flow to shareholders as dividends if the net debt is less than two annual Ebitda. Over the past year, the free cash flow of Megafon amounted to RUB35.2bn, and the ratio of net debt to Ebitda was 1.92. As a result, dividends should have been paid worth RUB24.6bn, Vedomosti calculates. Management wants to use the cash for capex this year of RUB75bn-RUB80bn, up from RUB56bn invested in 2017, of which RUB7bn-RUB8bn will be used to meet Yarovaya costs.
Russian state oil pipeline operator Transneft will pay 50% of its IFRS net profit for 2017 in dividends , Interfax reported citing the CEO of the company Nikolay Tokarev. Previously Transneft was one of the largest state-controlled companies that avoided complying with the 50% dividend requirement set by the Finance Ministry. Reportedly Transneft will pay RUB54.9bn ($0.9bn) final dividend for 2017, bringing the total dividend for 2017 to RUB82.5bn ($1.3bn). The full-year dividend translates into a dividend yield of 6.5%, "which puts Transneft on the list of the best dividend payers in the industry," VTB Capital commented on May 22, seeing the news as positive for the name. "We calculate that a payment of RUB 54.9bn translates into final dividends of RUB 7,573/share and, together with the already paid interim dividends of RUB 3,875/share, implies a full year payout of 50% of normalised IFRS net income (43% if non-adjusted), above our forecast of 25% of normalised IFRS net income," VTB Capital wrote. Transneft posted 19% year-on-year revenues growth to $15.2bn in 2017, with Ebitda up by 15% y/y to $7bn and net income at $3.3bn. Revenues and earnings increased mostly due to a 15%
60 RUSSIA Country Report June 2018 www.intellinews.com