Page 80 - RusRPTMay19

46.8 per ADR, which totalled 46.762bn. For January–June 2018, MTS paid 2.6 per common share, or 5.2 per ADR, which totalled 5.196bn. With the recommended dividend, payments to holders for 2018 could be 26 per share or some 52bn in total.
● Consumer
Detsky Mir’s BoD recommended final DPS for 2018 at RUB4.45/s. Total final dividends amount to RUB3.29bn (+14.7% y/y), representing 52.03% of IFRS net income. The AGM will be held on 16 May and record date to receive the dividends is set on 27 May. Final 2018 dividend yields healthy 5.06% (7% below BCSe) and is in line with the company’s dividend policy to pay at least 50% of IFRS NI and max 100% of RAS NI. Thus, FY18 DPS reaches RUB8.84 (+29% y/y), implying solid 10.04% DY to the current share price.
● Real estate
PIK’s Board of Directors has recommended a FY18 dividend of RUB22.71 per share. The announced amount implies a 6% dividend yield, while the total recommendation of RUB15bn (flat y/y) means a payout ratio of 48% of net operating cash flow vs. the minimum of 30% stated in the dividend policy. Last year, PIK delivered its highest ever net operating cash flow of RUB31bn, reflecting the record gross cash collection of RUB245bn and residential sales of 1.94mn sqm. We note that we forecast annual yields of 12% and 11% for LSR and Etalon, respectively. Amid the robust dividend distribution, PIK’s P/NAV multiple remains a demanding 0.9x vs. 0.4x of LSR and 0.3x of Etalon. We reiterate our 12-month Target Price of RUB400 and Hold recommendation.
Russian real estate company Etalon Group's board of directors 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.
● Utilities
Enel Russia's Board of Directors made a recommendation to pay DPS of RUB0.1414 for FY18, implying a total payment of RUB5,004mn on Friday 19 April. The record date was set for 8 July. The recommendation is fully in line with our expectation of a net income payout of 65% of IFRS in the form of dividends. That translates into a 2% y/y reduction in DPS on the back of the slight slide in net income. At the same time, at current levels the company is going to deliver as much as a 13.6% dividend yield and another 12.3% for 2019F, according to our estimates, which would be the largest dividend yield in the Russian utilities space. Thus, we see the news as positive for the stock.
The Ministry of Finance had offered to adopt a mandatory 50% dividend payout policy for InterRAO by introducing a 25% payout interim dividend at the company in order to comply with the government’s directive on a 50% payout for state-owned companies. The motion is currently being considered by the Ministry for Economic Development, according to the news source. Despite the substantial number of ongoing investment initiatives, including the massive share of DPM2 investment capex, the company’s active participation in the initiative to roll out smart meters and its potential purchase of Kaliningrad CHPs, as well as the ongoing negotiations on the localisation of combined cycle gas turbines (CCGT) and others, InterRAO’s impressive operational cash flow can accommodate both the ambitious investment programme and, at the same time, increase the payout to 50%. Nevertheless, we note that the FY18 dividend - at a 25% payout - has already been approved by the board and
80 RUSSIA Country Report May 2019 www.intellinews.com