Page 105 - RusRPTNov21

projects. Despite Novatek owning a 50% share of the project and receiving profits accordingly, it's important to remember that it only contracts something like 1/6 of the production for supply purposes. Its partners get the lion's share of the physical product for their own trading operations. That doesn't mean Novatek isn't seeing its 50% share of the profits per its equity stake, but it does mean that Novatek has a lot less control over how and with whom it negotiates for sales. The company may not increase its dividends, though. It might instead be using profits from Yamal to offset not spending from elsewhere as it builds Arctic LNG-2 and considers its capital allocation given CEO Leonid Mikhelson's concerns that demand may peak by 2030 and wipe out the business case for a host of long-term investments.
● Retail
M.video's Board of Directors has recommended a RUB35 per share dividend for 1H21, with a record date on 16 December. Our View: The announcement is in line with management's guidance during the 1H21 IFRS results, and implies a 100% payout of adjusted net income for 1H21 (RUB 6.3bn). This semi-annual yield stands at 6%, which corresponds to our annual forecast of 15%. The dividend recommendation also delivers on M.video’s dividend policy for a 100% payout ratio from IFRS net income. The shares are down 13% YTD and now demand 2022F EV/EBITDA of 4.0x and P/E of 7.1x, which we consider to be one of the most appealing exposures in our consumer coverage.
105 RUSSIA Country Report November 2021 www.intellinews.com