February 28, 2016, 23:12 / Business

Rosseti may pay dividends for the first time in history

The holding's management stated that the company is ready to return half of its net profit under IFRS to shareholders Ivan Peschinsky

Rosseti brought in dividends / E. Razumny / Vedomosti

“We are turning a profit,” Rosseti CEO Oleg Budargin boasted on Friday (quoted by Interfax). And he announced that the company was ready to pay dividends for the first time since 2013 if the government ordered it. In August, Rosseti announced that it was possible to pay dividends in the amount of 25% of net profit under RAS. Payments on ordinary and preferred shares are planned, says a representative of Rosseti. According to him, we are talking about the payment of dividends from profits according to IFRS. All state-owned companies must pay 50% of net profit according to IFRS, the Ministry of Finance proposes.

According to Rosseti's dividend policy, the size of dividends is determined by the board of directors on the recommendation of the general director. For the calculation, the result according to RAS is taken. The payment per preferred share is set at 10% of net profit divided by the number of shares that make up 25% of the authorized capital. Rosseti (and their predecessor IDGC Holding) did not pay dividends on ordinary shares. The last time the company paid for preferred shares was at the end of 2012 from retained earnings (RUB 159.6 million).

"Rosseti"

Electric Grid Holding
The main shareholder is the Federal Property Management Agency (86.34% of ordinary shares). Capitalization – 80.6 billion rubles. Revenue (IFRS, 1st half of 2015) – RUB 351.9 billion. Net profit – 24.1 billion rubles.

The company does not provide a forecast of net profit under IFRS for the year. Dividends in the amount of 50% of net profit according to IFRS will not affect the investment program, Budargin assured. “But, of course, it is desirable that the money remain in the company to increase the volume of repair work,” he added (quoted by Interfax).

The latest announced size of Rosseti’s investment program for 2016 is 240 billion rubles, recalls Natalya Porokhova, head of ACRA’s research and forecasting group. Own funds cover two-thirds of expenses, the rest is borrowing, for which the situation is unfavorable, she notes. There may not be enough money to pay dividends, says Raiffeisenbank analyst Fedor Kornachev: the holding has a negative free cash flow. And on the company’s accounts as of June 30 there were 93.3 million rubles.