Page 76 - RusRPTDec18

DY. Under a 50% payout, this assumes adj. net profit at RUB 18.6bn on today's 3Q18FIFRS results, 53% above the Interfax consensus forecast (20 November) of RUB 12.2bn. Given that the difference is too wide to be explained by underlying assumptions, we believe that a higher than expected dividend might be a factor of the higher payout The announced dividend assumes a 77% payout based on the consensus adj. net profit forecast. PhosAgro was criticised by the investment community for showing a dividend yield half that of the Russian metals and mining universe. Given that the stock trades at 5.0x EV/EBITDA 2018F vs. the 5-year average of 7.1x, we see these strong dividends as a positive trigger ahead of the results. VTBC 12-month TP of USD 17 implies a 38% ETR: Buy reiterated.
Evraz has announced that it will pay a third interim dividend for 2018 of $0.25 per share, or $361mn in total. This brings the amount of dividends to be paid in 2018 to $1.55bn, for a robust 16% yield (including the final dividend of $426mn for 2017), while interim dividend payments announced for the year now amount to $1.13bn. The record date is set for November 23 and the payment date for December 21. As a reminder, Evraz's dividend policy only guarantees a minimum of $300mn in dividends per year; anything beyond this is at the BoD's discretion. However, at the recent investor day, Evraz's management mentioned that it intends to pay its FCF as dividends, as it is comfortable with the current net debt/EBITDA level of around 1.0.
RusHydro’s dividend policy could be adjusted from the current 50% payout of nominal IFRS net income to reduce the effect of non-cash items. One proposal is to establish a floor for dividend payments that could be represented by the average dividend payment in the last three years prior to the period in which dividends were accrued. This implies that RusHydro’s annual dividend is to be the higher of the three-year average and a 50% payout of nominal IFRS net income. The article also claims that the updated dividend policy could be approved as early as the end of November. The news is strongly positive for RusHydro, as this approach would add more sustainability and predictability to the dividends.
Tatneft’s Board of Directors recommended to the company’s EGM interim dividends of RUB 52.53/share ($0.77/share) for both ordinary and preferred shares for 9mo18, including the already approved 6mo18 dividends of RUB 30.27/share ($0.45/share), according to a company press release. The total amount of dividends (RUB 51.8bn, or $0.8bn) recommended for distribution for 3Q18 corresponds to 75% of net income under RAS for the reporting period, according to the company. The record date for dividends has been set as 9 January 2019. The extraordinary shareholders meeting is to decide on dividends on 21 December, with registration closing on 26 November. The recommended interim dividends for 9mo18 imply DPS of RUB 22.26 for 3Q18, which is above both our forecast of RUB 19.20 and the Bloomberg estimate from 13 November of RUB 18.23.
76 RUSSIA Country Report December 2018 www.intellinews.com