Page 86 - RUSRptApr17

Gazprom’s Management Committee recommended to the board it keep its 2016 dividends at RUB7.89/share, or about 20% of income and below the 50% level that the Ministry of Finance is asking for. Although this sounds rather disappointing, bankers say the lack of market reaction the recommendation of a RUB 7.89/share dividend is broadly in line with market expectations. This DPS implies a dividend yield of 6.3% and an estimated payout ratio of c.20% of IFRS net income. Under a 25% payout, the company would deliver a dividend yield of 7.9%, according to VTBC. There might be an upside risk to the dividend payment of RUB 7.89/share, as last year Gazprom's management recommended a RUB 7.4/share dividend, while the BoD decided to increase it to RUB 7.89/share.
The board of Gazprom Neft recommended paying record RUB50.6bn (€835mn) or RUB10.68 per share in dividends for 2016 , media reports said on April 24. These make the highest dividends since 2005, when Gazprom acquired 75.68% for $13.7bn in oil company Sibneft in May 2006 and transformed the asset into Gazprom Neft, Vedomosti daily noted. “The recommended dividend size for 2016 is in line with our and corresponds to an IFRS-based dividend payout ratio of 25%, which is a traditional level for Gazprom Neft,” Gazprombank commented on April 24.
MTS board recommended a very generous RUB15.6 dividend payout for 2016. In total the company plans to pay out RUB31.2bn, with the dividends set to be approved at the AGM on 29 June. The implied dividend yield is 5.7%, and the AGM record day is 26 May. MTS has already paid a RUB12 dividend for 1H16. The news is positive for sentiment and in line with MTS's dividend policy. MTS is one of the best dividend opportunities in the Russian universe with an annual dividend yield of 10%.
Sberbank announced dividends of RUB6 on both the common and preferred line , which was well received by the market. As a result the common shares added 3% on heavy volume, while the prefs rallied an impressive 4%.
Russian diamond major Alrosa will pay 50% of its IFRS net profit as required by the government, Finance Minister Anton Siluanov told the press on April 19. Alrosa’s dividend policy requires it to pay 35% of the net profit, but the company complied with the government’s call for state-owned enterprises (SOE) to pay 50% to state budget ahead of its successful SPO in July 2016.
Globaltrans altered its dividend policy from being linked to net income (with no less than a 30% payout) to FCF-based. The payout ratio from FCF now depends on the leverage and varies from i) 0+% (if the leverage is 2.0x and above); to ii) 30% and above (1.0-2.0x) and iii) 50% and above if leverage is below 1.0x. With net debt/EBITDA of 0.7x as of the end of 2016 and FCF of RUB 7.2bn in 2016 (adjusted for the non-controlling interest in BTS) Globaltrans announced the highest dividend in its history, RUB 39.2/GDR, for a total of RUB 7bn, implying a 10% yield. The dividend assumes a payout ratio of almost 100% of FCF. With a cash position of RUB 4.8bn as of the end of 2016, the company will have to finance it by debt, which would increase leverage to 0.8x net debt/EBITDA, while the company sees 1.0-2.0x as a comfortable range. The dividends are to be put up for approval by the AGM on 24 April.
Polymetal’s revised dividend policy to an implied total dividend yield of
86 RUSSIA Country Report April 2017 www.intellinews.com