Page 15 - bne_March2019_20190306 magazine

bne March 2019 Companies & Markets I 15
There are some in government who oppose the initiative. Deputy Prime Minister Dmitry Kozak wants to limit dividends to finance SOE investment programmes, two officials said. According to them, at the Medvedev meeting, Kozak proposed not paying any dividends on profits that infrastructure companies receive from state-regulated activities, so that they can use this money to finance investment programmes.
In 2019, the government expects to receive almost RUB590bn from SOEs as dividends, another RUB626bn in 2020, and by 2021 the amount should increase to RUB675bn.
“Gazprom's investment programme remains a problem as it reached a record RUB1.5 trillion in 2018”
Based on previous budgetary cycles, there is a risk that the state will receive 70% less as dividends, the chairman of the Accounts Chamber Alexey Kudrin warned in October.
At the end of 2017, 50% of net profit under IFRS was paid by all large state-owned companies, except for Gazprom, which gave up only 26% of its profit under IFRS, or about
Russia buys a record amount of gold in 2018
Ben Aris in Berlin
Russia's gold reserves have grown for 13 years in a row as there was a clear policy decision to shift more of Russia’s reserves to the yellow metal. Perhaps by coincidence this was the same year President Vladimir Putin gave his famous speech at the Munich Security Conference warning the west that Russia was not going to be bullied and lied to by the west any more. Russia started its military modernisation in 2012 and annexed the Crimea in 2014.
Since 2007 Russia has been rapidly accumulating gold in its reserves and the pace has accelerated recently. Moreover, it also sold a licence for Sukhoi Log, the largest gold deposit in the world last year after dithering for almost two decades. Russia is currently on course to over take Australia as the biggest gold producer in the world.
RUB190bn, despite being the largest of the SOEs. The com- pany attributed its failure to its large investment programme into pipelines including Power of Siberia, Turkish Stream and Nord Stream 2 pipelines. Having failed to receive additional dividends from Gazprom, the state made up for the loss by hiking the mineral extraction tax (MET) instead.
In what maybe the first results of the government's threat to take direct control of these decisions, the head of Gazprom’s finance and economics department, Alexander Ivannikov, told Interfax on January 29 that the company’s current budget assumes a dividend of RUB10.43 per share for 2018, which is 30% higher than the payout for 2017.
Gazprom's investment programme remains a problem as
it reached a record RUB1.5 trillion in 2018. Even after the completion of the current major construction projects the company still plans to invest no less than RUB1 trillion a year, according to deputy chairman of the board of Gazprom Andrei Kruglov. The upcoming programme includes RUB1.326 trillion in 2019, before falling to RUB1.065 trillion and 1.251 trillion respectively in 2020 and 2021.
Russian Railways' investment programme for 2018 was RUB550bn, utilities holding Rossetii invested RUB240bn, and Transneft spent RUB342bn.
Over the last 13 years Russia has bought 1,726.2 tonnes of gold to bring the total to 2,113 tonnes at the end of 2018, the WGC indicates.
Last year’s gold purchases were financed from the sale of circa $100bn of US treasury bills by the CBR, as bne IntelliNews reported in November.
According to the US Treasury, the central bank began to actively sell American securities in April. From the beginning of 2017, investments in treasury bonds amounted to about $100bn, but fell to $48.7bn a year later.
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