Page 86 - RusRPTJun19

the risk."
● Retail
Obuv Rossii’s BoD recommended dividends for 2018 at Rb2.36/sh,
according to the company’s press release. The recommendation corresponds to the current dividend policy, suggesting 20% payout from IFRS net income. DPS implies a 4.95% DY. AGM will be held on 28 June and record date is set for 18 July. Dividends’ recommendation coincides with the current dividend policy, implying 20% payout from IFRS Net income – Rb2.36/s with a 4.95% DY.
● Real Estate
Russian developer Etalon Group's BoD has recommended an annual FY18 dividend of $0.19 per GDR. The record day is to be determined later.The recommended amount of RUB3.6bn ($55mn) is $0.19/GDR and represents an 11% annual yield. The dividend is a one-off deviation from the company’s dividend policy, which assumes a 40-70% payout ratio. The deviation was due to the unrepresentative base for dividend distribution in FY18, as net income for 2018 was reported at RUB37mn and impacted by a number of one-off items, but its operating cash flow stood at RUB15bn and cash was at RUB23bn. This year, the company is paying an annual dividend, vs. the semi-annual last year.
The supervisory board of major Russian real estate developer LSR Group (LSR) recommended a dividend of RUB78 per common share (or RUB15.6 per GDR) for the full year 2018, setting a record date of July 10. The payout implies a 11.9% dividend yield at the current share price, Sberbank CIB estimated on May 17. "The RUB78 DPS [dividend per share] means that the company is sticking to its practice of paying out RUB8bn ($124mn) in dividends annually," the analysts commented. The payout came in line with 12% dividend yield previously expected by BCS Global Markets other analysts. “We view LSR’s P/NAV multiple of 0.4x as an appealing exposure to the development sector, with favourable sustainability for the new regulatory framework, and quality dividend distribution (we expect a 12% dividend yield for the next 12-month),” VTB Capital wrote on April 15. Sberbank CIB reminds that LSR maintained the same dividend payment since 2015 (the official dividend policy is to pay out at least 20% of consolidated IFRS earnings). The announced payout was what the analysts had expected "given the improved OCF [operational cash flow] generation in 2018 and the upbeat comments from the management on the recent earnings call." LSR Group has released a robust 1Q19 trading update, with volumes unchanged y/y, and a 20% y/y advance in pricing due to the increasing share of Moscow projects in the sales mix, the company said on April 15. LSR has also taken advantage of the current popularity of Russian stocks, and on April 2 LSR's founding shareholder sold 10mn shares, decreasing his stake in the company to 50.3%. The transaction price of RUB580 implied an 8.7% discount to the previous day’s closing price; the stock has since recovered this lost ground.
● Metal & Mining
Russian diamond major Alrosa sold RUB1.2bn ($18mn) worth of non- core assets in January-March 2019, the company said on May 7. The biggest sale was of the Blue Wave sanatorium which was auctioned for RUB1.21bn. "Total sale size is equivalent to 8% of 1Q19 estimated FCF [free cash flow] and may be positive for future dividend payments if the company decides to distribute this cash inflow," BCS Global Markets commented on May 8. Overall over the course of 2019, Alrosa plans to alienate 90 non-core assets with a total book value of RUB6bn, the company added. Alrosa pays 70% of its FCF in dividends and is one of the best-paying dividend stocks among Russian Metals and Mining equities. The name is included in BCS GM's Dividend Basket portfolio that shows a 12-month dividend yield of 13.7%.
86 RUSSIA Country Report June 2019 www.intellinews.com