» Topic: Gazprom Declares Dividend (14.5% of net income per share).Bonner & Partners

Tuesday, 16 January 2018

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Gazprom Declares Dividend (14.5% of net income per share).

Welcome! Forums The Big Picture Gazprom Declares Dividend (14.5% of net income per share).

This topic contains 1 reply, has 1 voice, and was last updated by  JAY V. 3 years, 6 months ago.

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  • #17682

    JAY V.
    Participant

    After considering the Family Office reasons for investing in Gazprom and RSX, we built a position in Russian equities Gazprom, RSX, CTCM, Yandex. All had been hammered by the market as highlighted by Family Office investment guidance leadership. Russian FX rates at the time were at a trough – the ADRs reflected this in their price.

    Gazprom financials are available and the board declared a dividend, as I peruse the numbers I have a question maybe someone knows the answer. I could not find it.

    Gazprom IFRS financials – highlights
    in Russian Rubles, per Price Waterhouse

    FX rate RUBLES TO US$ 1.00 – rounded year end.
    2013: 33 2012: 30.50

    Ebitda
    2013: 2 trillion 2012: 1.64 trillion
    in US$:
    2013: $60.6 billion 2012: $53.7 billion

    Earnings Per Share- in Rubles
    2013: 49.64 2012: 53.35
    in US$:
    2013: $1.50 2012: $1.75

    Shares Outstanding
    2013: 23.7 billion, per note 25
    2012: 22.9 billion, per page 5

    Note: 2 Russian shares per 1 ADR

    Dividend Declared
    in Rubles per share
    2013: 7.20 2012: 5.99

    in US$ at year end exchange rate. Actual will vary due to FX rate at payment date.
    2013: .2181 2012: .1963

    IN US$ Per ADR:
    2013: .4362 2012: .3926

    Percent of Net income per share
    2013: 14.5% 2012: 11%

    I would like to understand why is the dividend declared not 25% of IFRS net income, if anyone can clarify, I will be grateful?

    #18191

    JAY V.
    Participant

    One conjecture I heard is that there are internal disagreements between the company and the Finance Ministry as to how to calculate the 25%.

    THIS IS FROM THE GAZPROM Q & A , ON THEIR WEBSITE:
    ( left me thinking that not everything is black & white…)

    How is the dividend amount on Gazprom shares determined?

    The dividend payment per share is calculated on the basis of the net profit specified in the accounting statements of Gazprom (parent company) in compliance with the Russian accounting standards. In its turn, the net profit depends on the Company’s operating and financial results.

    The Gazprom Dividend Policy was approved by the Board of Directors in 2010. The Dividend Policy defines the dividend distribution procedures.

    The document stipulates that 17.5 to 35 per cent of the Company’s net profit may be allocated for dividend payouts.

    Dividends are calculated in the following procedure:

    A share of the net profit is channeled to form the reserve fund.

    Another share of the net profit in the amount of 10 per cent is used for dividend payouts. 40 to 75 per cent of the net profit is retained for the Company’s investment purposes. The remaining share of the net profit is divided into equal parts to pay out dividends and to form the reserve for investment purposes.

    The net profit intended for dividend payouts may be adjusted (reduced) for the amount of Gazprom’s financial investment revaluation. This approach enables the Company to allocate the profit secured by the real cash flow for dividend payouts.

    The Shareholders Meeting adopts the final decision on the dividend amount as recommended by the Board of Directors. The annual dividend payments adopted by the Meeting should not exceed the amount recommended by the Board of Directors.

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