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2019 would likely remain at the same RUB190bn level, due to its heavy capex programme, CEO Alexey Miller said at the time.
In 2019, the government expects to receive almost RUB590bn ($8,9bn) from SOEs as dividends, another RUB626bn in 2020, and by 2021 their amount should increase to RUB675bn. Based on previous budgetary cycles, there is a risk that the state will receive 70% less as dividends, the chairman of the Accounts Chamber Alexey Kudrin warned in October. Gazprom expects natural gas prices in Europe this year to average $230- 250/kcm. Gazprom estimates that its share of the European gas market grew to 36.7% in 2018, from 34.2% in 2017, amid lower production in the region.
This is still way down on the 80% share in the European gas market Gazprom had in the 90s. Gazprom expects its LNG portfolio to exceed 6mmt by 2020, from 4mmt last year. A buyback is unlikely within the next year, according to the company. The company’s natural gas price estimate for 2019 is broadly in line with VTBC’s forecast of $230.8/kcm. However, given the significant drop in European gas prices (which now stand at around $198/kcm), VTBC analysts see downside risks to the 2019F financial forecasts for the company. To provide an indication, were the current gas price in Europe to remain throughout the year, that would mean 9% lower Ebitda for the company, VTBC estimates.
Russian utility RusHydro tried to sooth investors worries over dividend payments at a capital market day. Ahead of the massive write-offs in 2019 after the Russian Far East projects are commissioned, RusHydro’s management rolled out its new dividend proposal, which envisages setting a floor for the absolute dividend level at par with the three-year average. “This is a welcome development, in our view, as we expect 2019F net profit to drop at least 35%, thus putting pressure on dividend expectations (which would now be relieved, should management’s proposal be adopted),” Vladimir Sklyar of VTB Capital (VTBC) said in a note. The company guided for capex of RUB123bn ($1.9bn) in 2019, while VTBC estimate that the companies EBITDA will be RUB112.5bn. That means if the company sticks to its capex plan, the dividends for both FY18 and FY19 will have to be financed out of debt raising some question marks. The management is proposing to set the floor for dividends at the 3-year average, implying smoothed out dividend payments of around RUB15bn (7.0% yield) in the next few years.
In 2019, the government expects to receive almost RUB590bn ($8,9bn) from SOEs as dividends, another RUB626bn in 2020, and by 2021 their amount should increase to RUB675bn.
Based on previous budgetary cycles, there is a risk that the state will receive 70% less as dividends, the Chairman of the Accounts Chamber Alexey Kudrin
89 RUSSIA Country Report March 2019 www.intellinews.com