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initially announced figure). NLMK reiterated that if there is a market recovery, it could increase dividends later this year to compensate for the difference between the dividends announced for 4Q19 and 1Q20 and those that the dividend policy would have supposed. NLMK expects domestic steel demand to drop 40-45% y/y in 2Q20, with demand from the construction and oil and gas sectors (which together account for 85-90% of NLMK's sales in Russia) to drop by 40-50% y/y. It sees a gradual recovery starting from the end of June, which should lead to a drop of around 15% y/y in domestic steel demand in 2020.
● Other
Russian coal major SUEK appoints the former head of its utility arm Siberian Generating Company Stepan Solzhenitsyn as the new CEO, the son of Nobel prize winning author and Russian literary icon Alexander Solzhenitsyn. The current CEO of SUEK, Vladimir Rashevsky, is to remain a member of the Board of SUEK and become a member of the Board of Evrochem (Eurochem) fertiliser major. As reported by bne IntelliNews, Russian companies have been putting ESG policies into place in the last year, with the focus on the environmental element only expected to become more relevant for investors.
TCS reported better than expected 1Q20 IFRS results and announced a second 2020 interim dividend.
§ NII came strong +40% y/y to Rb25.3bn – 6%/3% beat to BCSe and cons-s, driven by yet strong 43% y/y gross loans growth and cost of funding further reduction to 4.8%. Thus, NIM stayed strong at 20% level.
§ Net F&C came strong and broadly inline with expectations – at Rb5bn (+21% y/y; -1% q/q) – driven by SME, brokerage and FX operations. Non-banking businesses are quite supportive, given current CoR pressure and contributed 34% to TCS revenue.
§ CoR came much higher vs BCSe and cons-s at 16% with 6.0ppt due to macro adjustment on IFRS9. NPLs stayed mostly unchanged at 9.4%.
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OpEx came 1%/6% better vs expectations with expected OpEx growth deceleration to 7% on the back of more prudent lending policy.
Instead of guidance for 2020 the following performance indicators were provided: gross loans portfolio in steady stance; CoR to remain elevated; cost of borrowing to decline y/y; the Group will remain profitable and maintain adequate CAR levels.
9.2.12 Transport corporate news
Russian transportation major and port operator Fesco Group is demanding that its largest shareholders Ziyavudin Magomedov and the US investment fund TPG recover $1bn worth of loans raised in 2012 to gain control in the group, RBC business portal reports on May 13 citing a letter from Fesco's legal team. As reported by bne IntelliNews, Ziyavudin Magomedov, then one of Russia's richest men, was arrested in March 2018
123 RUSSIA Country Report June 2020 www.intellinews.com
