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bne May 2017 New Europe in Numbers I 67
Dividend season kicks off
Russia’s 2017 dividend season is about to kick off with annual general meetings in the coming couple of months. Russia’s listed companies are now amongst the most generous in the world when it comes to sharing their profits with their share- holders, but the state-owned companies led by Rosneft are resisting a demand by the Russian Ministry of Finance to pay out 50% of their profits. A lot of money is at stake.
In 2017, Russian listed companies are to distribute RUB1.56 trillion ($27.3bn), up +21% from 2016. The final 2016 dividend distribution season could bring in some RUB1.13tn, 72% of total 2017 distributions, VTB Capital said in a note.
“We estimate the 12-month dividend yield at 4.9% for the RTS [index]. On the governance front, state-owned enter- prises (SOE) dividends are still a hot topic. So far, there is no clarity as to whether the government will publish a new 50% payout directive or examine each SOE as a separate case, while setting a ‘hard’ 25% floor. We expect the issue to be resolved before the BoD meetings season kicks off in late April,” VTBC strategist Alexey Zabotkin said in a note.
The term of validity of the previous directive, stipulating a 50% payout from the highest base and issued in April 2016, expired on December 31, 2016. Since no new directive has been issued, starting from 1 January 2017 SOEs are again required to pay not less than 25% of net income (as set forth in the current regulations).
Last year, even in terms of the special payout directive, only five SOEs matched the guideline to pay 50% of the high- est earnings base, says VTBC: Alrosa (50% payout of IFRS), Bashneft (50%), Moscow Exchange (50%), RusHydro (48%),
and Rostelecom (118%); while Gazprom (24%), Rosneft (35%) and Transneft (9%) recommended dividends below the head- line 50% guideline, having been provided with exemptions for company-specific reasons.
“Our sector teams’ base case scenarios for SOEs in 2017 (based on the 2016 financial results) imply a 50% IFRS net income payout for only two companies, Alrosa and Aeroflot. FSK is next in line after the leaders in terms of the payout our colleagues expect (32%). Gazprom’s and Gazprom Neft’s base case payouts are 25%, which still imply upside to the FY15 DPSs,” VTBC said in a note.
Russia's top dividend yields, forecasts for 2017
Country
Ticker
Dividend per share, RUB
Yield
Bashneft pref
BANEP RX
148
12.2%
Norilsk Nickel
GMKN RX
998
10.9%
Aeroflot
AFLT RX
17.5
10.6%
MegaFon
MFON RX
64.5
10.4%
Rostelecom pref
RTKMP RX
5.9
10.0%
Alrosa
ALRS RX
9.1
9.5%
MTS
MTSS RX
26
9.0%
Severstal
CHMF RX
70.8
8.6%
NLMK
NLMK RX
8.6
7.8%
Rostelecom
RTKM RX
5.9
7.6%
Source: Bloomberg, Gazprombank estimates
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March 31, 2017 www.intellinews.com
Bulgaria’s kingmaker parties to hold GERB
to ransom
bne IntelliNews
The centre-right Citizens for European Develop- ment of Bulgaria (GERB) might have won the snap parliamentary elections held on March 26, but the party is heading for tough negotiations with possible partners to gain a large enough majority to form a government, and will most likely be forced to make big compromises to stay in power.
Central Europe starts to tot up Brexit fallout
bne IntelliNews
Central European states expressed regret that the UK is leaving the EU as London triggered the Ar- ticle 50 withdrawal clause on March 29. They also quickly moved to start totting up the direct costs.
The economic effects of Brexit on Central Eu- rope are hard to pinpoint given the wide range of
Two smaller groups in the parliament – the na- tionalist United Patriots coalition and the populist Volya (Will) party – have already said they will pre- sent a united front in talks with GERB. They have also indicated they are willing to work with the Bulgarian Socialist Party (BSP), the runner-up in
See page 2
TmhaejoVrispeogwreardsr.egion will be hard hit by the loss of their closest ally amongst the bloc's
potential scenarios under which the UK will exit. However, most suggest the damage will be limited by modest direct trade ties.
In political terms, the Visegrad region will be
See page 3
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