Merrill Lynch says Rosneft’s 2017 dividends to soar to 16 rbl/shr

MOSCOW, Feb 1 (PRIME) -- Russian oil major Rosneft’s 2017 dividends will almost triple to 16 rubles per share from 5.98 rubles per share the company paid on 2016 results, Merrill Lynch said in a research note on Thursday.

Rosneft may pay 23.6 rubles per share in dividends for 2018 and 30 rubles in dividends for 2019. Rosneft has a strong free cash flow, and calculations of dividend payments include recent acquisitions and payments the company received from multi-industry holding Sistema, Merrill Lynch said.

Investors were worried by large prepayments done in aggressive merger and acquisition deals, but the worries have abated. Integration of international assets is going on schedule, and the assets will contribute to Rosneft’s results already in 2018.

Generation of free cash flow and reduction of the balance of prepayments will allow Rosneft to start cutting its debt burden in 2018, the research note read.

State oil and gas holding Rosneftegaz holds an about 50% stake in Rosneft, BP owns 19.75%, QHG Oil Ventures Pte. Ltd. holds 19.5%. A deal to sell a 14.16% stake in Rosneft to China’s CEFC has not been closed. One share belongs to the government and the rest is free float.

(56.1840 rubles – U.S. $1)

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