Page 111 - RusRPTOct20

Russian metals and mining company​ ​Mechel​ has abandoned a moratorium on bankruptcy and plans to make a deferred payment of dividends, ​the company said in a statement on September 23. “Hereby, Public Joint Stock Company Mechel... declares its refusal to apply against Mechel PAO a moratorium on the initiation of bankruptcy proceedings on applications filed by creditors (hereinafter – the moratorium), introduced on the basis of a resolution of the Russian government... to the Unified Federal Register of Bankruptcy Information,” the company said. A representative of Mechel confirmed abandoning the moratorium, due to, which the procedures for the buyback of shares and the payment of dividends were suspended, and confirmed the company's intention to fulfil these obligations. In early July, Mechel's shareholders approved paying RUB3.48 per preferred share in dividends for 2019, but said later the obligation was not fulfilled in full in the total amount of RUB480.45bn. Mechel used the right to bankruptcy granted by the government and, accordingly, to pay dividends. A representative of the company said earlier that Mechel intends to fulfil its obligations to pay dividends after the end of the moratorium.
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Globaltrans​ dividend for 2H20 guided at R5bn. ​The management guided for R5bn of dividends from the 2H20 results. Moreover, the CFO indicated that though a formal net debt/EBITDA threshold is in place in the dividend policy, should leverage exceed 1.0 the BoD would conduct additional analysis, taking into account other factors such as free cash flow and the market situation and outlook. Since the company once again emphasized its commitment to dividends, we think the guided R5bn payment looks quite secure and would only be cut in the event of a further substantial deterioration in the market. We therefore expect the company to pay R13.3bn of dividends in the next 12 months, for a 16% yield. The ongoing buyback program is unlikely to change the dividend outlook. The CFO indicated that the company prefers dividends to buybacks, so we do not expect a substantial acceleration in buybacks, at least at the current price levels.
RusHydro​’s board has recommended that the AGM approve a dividend in the amount of RUB 0.03568039/share for FY19, with the record date set for 10 October. ​In line with the company's dividend policy, management’s recommendation matches the average for the preceding three years. The total dividend payment of RUB 15.67bn is in line with our expectations, although the DPS of RUB 0.0357 is a touch lower than the company's guidance (that is driven by the increased number of shares due to the recently completed placement in favour of the state budget). The announced dividend implies a 5% dividend yield. Based on our expectations, we expect the FY20F dividend to stay broadly flat, growing only 4% YoY to RUB 16.4bn, equivalent to a DPS of RUB 0.0373, or a 5.1% dividend yield. Despite the 60% YoY growth in the bottom line in 1H20, we continue to believe that write-offs, predominantly from commissioning Sovetskaya Gavan CHP, are going to exert pressure on the company's profit on an annual basis. However, we expect RusHydro to return to its traditional May-June schedule of dividend distribution starting from next year.
111 ​RUSSIA Country Report​ October 2020 ​ ​www.intellinews.com