Page 87 - RUSRptApr17

5-9%, significantly above peers’ average of 1%. This adds to the 19% p.a. EPS growth we see during 2017-20F, driven by output growth, which remains underappreciated by the market. We think the much improved dividend outlook and leading growth profile deserve a higher 1.8x P/NAV and 8.5x EV/EBITDA. The higher 50% dividend payout ratio is a significant addition to the investment case, with a 5% regular dividend yield now ensured for 2017F, and 4pp on top of that in the form of a special dividend possible at the end of 2017F. Based on the output growth profile, the total dividend yield might be up to 11% upon Kyzyl ramp-up by 2020F.
Russian multi-industry conglomerate AFK Sistema reported Oibda revenues rising by 14.8% year-on-year to RUB40.7bn (€680.3mn) under IFRS and cutting net profit to RUB6.2bn in the fourth quarter of 2016 from RUB10bn loss seen for the same quarter of last year. Sistema announced final dividends for 2016 of RUB0.81 per share (3.6% yield), slightly ahead of Gazprombank’s expectation. Also the dividend yield threshold was raised for 2017: either 6% (4% earlier), or RUB 1.19 per share (whichever of the two conditions is higher).
NCSP's BoD recommends paying dividend of RUB 0.7788237 per ordinary share, implying a 11% yield. The record date for ordinary share owners is 29 May 2017. The ex-dividend date for GDR holders shall be one business day prior to the record date. The AGM meeting is scheduled for 18 May. The dividend implies a high 11% dividend yield, based on the closing price on the day of the announcement on April 19.. At the current exchange rate, the GDR dividend is $1.04. The dividend payment assumes RUB 15bn for 2H16, and together with prior dividends, the total amount for 2016 is RUB 25bn, or around $450mn vs. $428mn net income (adjusted for FX gains).
Tatneft’s Board of Directors has recommended a payout for 2016 of 50% of IFRS net income (the record date is 7 July). According to our calculations, that implies dividends per share of RUB 22.8 and dividend yields of 7% and 11% for Tatneft’s ords and prefs, respectively. We consider this development to be a massive improvement in corporate governance practice.
Risks. Apart from the general risks of weaker/stronger oil prices and the RUB exchange rate, the potential unsustainability of this dividend pattern is the key downside risk.
87 RUSSIA Country Report April 2017 www.intellinews.com