PRESS: Rostelecom may reduce dividends for 2016 to 5.39 rbl/share

MOSCOW, May 15 (PRIME) -- Russian state-controlled telecom operator Rostelecom’s management has suggested that the board of directors recommend paying 5.39 rubles per common and preferred share in dividends for 2016, which is by 0.54 rubles less than the amount paid for 2015, business daily Kommersant reported on Monday.

The board of directors will consider the issue later on Monday. The final amount of dividends could reach 15 billion rubles, including 6.45 billion rubles to be received by the government. The 2015 dividends were at 16.5 billion rubles.

A source close to Rostelecom’s board of directors said the 5.39 ruble dividend implies a yield of over 7%. The total payment complies with the dividend policy obliging the company to allocate at least 75% of free cash flow for dividends, with the total amount paid over three years to be above 45 billion rubles, as the source said.

Rostelecom’s free cash flow was at 13.2 billion rubles in 2016, according to the International Financial Reporting Standards report, as compared to 22 billion rubles in 2015.

“Last year the free cash flow was higher, and Rostelecom distributed 75% of it. This year, despite the indicator being lower, the company pays 15 billion rubles, which is 113% of the 2016 free cash flow,” the source said.

(57.1640 rubles – U.S. $1)

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