LUKOIL got greedy

Investors consider the company's dividends too low

Today in Astana there will be a meeting of the board of directors of LUKOIL, where the amount of dividends based on the results of last year will be determined. However, yesterday the vice-president of the company Andrei Gaidamaka told Reuters that earnings per share would be 33 rubles. The total amount of payments, if approved by shareholders at the annual meeting, may exceed RUB 28 billion. (approximately $1 billion). Thus, LUKOIL intends to distribute almost as much to its shareholders as Surgutneftegaz, which has never been particularly generous to investors, but increased payments for last year compared to the previous one (other large oil companies have not yet approved the amount of dividends). True, most of the funds that Surgutneftegaz will transfer to shareholders will return to the company, since the owners of a significant package of securities are its own subsidiaries.

LUKOIL is going to transfer 18% more dividends to the owners of its securities than last year, when it paid 28 rubles. per share, but investors were still unhappy. They expected to receive significantly more - after all, according to experts, shareholders would account for only a little more than 15% of net profit, while LUKOIL promised to increase the volume of payments to 40%. At the same time, at Surgutneftegaz, if you believe the data of its general director Vladimir Bogdanov regarding the net profit received last year, this figure will be at the level of 33%.

“So far, LUKOIL is moving quite slowly in this direction (increasing the amount of net profit allocated to dividends. - Ed. ), notes Troika Dialog analyst Valery Nesterov. "Expected distributions to shareholders represent only 15.5% of projected 2005 US GAAP net income." According to his calculations, the company's shareholders could receive 36 rubles. per share. MDM Bank analyst Andrey Gromadin believed that the company would pay 44 rubles. per share, and Kakha Kiknavelidze from UBS - 45 rubles. per share.

However, it is worth noting that LUKOIL last year spent significant funds on acquiring assets in Kazakhstan; in addition, the company is making significant capital investments, including in oil refining, and intends to participate in auctions for the purchase of new fields.

At today's meeting of the board of directors of LUKOIL plans to consider other issues. In particular, the possibility of the company acquiring its own shares on the market - in January of this year, LUKOIL Vice President and one of the shareholders Leonid Fedun approached the board of directors with such a proposal. Later, President Vagit Alekperov clarified that we could talk about buying out 2% of the company's shares.

Now LUKOIL shares are being bought on the market by its strategic partner - the American ConocoPhillips. In the first quarter, it increased its stake to 17.1% and by the end of the year it intends to increase it to 20% - the maximum stake that American oil companies can own in LUKOIL by agreement with the Russian authorities and the management of the holding itself. LUKOIL does not explain why they are going to buy back shares from the market. As Mr. Gaydamaka noted yesterday, as part of the expansion of the option program to encourage the company's management, securities will definitely not be purchased: “We have an option program of slightly less than one percent. These shares have already been purchased and distributed among management. “I have no information that any decision was made to expand this option program.” Experts do not rule out that in the future LUKOIL will exchange the repurchased shares for some asset. In particular, Mr. Fedun noted that LUKOIL was “studying the acquisitions that ConocoPhillips is making,” and Mr. Alekperov said that the company is actively interested in European refineries. But a source in LUKOIL assured Interfax yesterday that the holding will buy back its shares from the market after ConocoPhillips increases its share in it to 20%, therefore, there is no talk of any exchange of assets with it.

Denis REBROV