PRESS: Russia’s Rostelecom leads state firms by dividends

MOSCOW, Mar 21 (PRIME) -- Russian telecom operator Rostelecom leads state companies by dividends with an average of 39.8% of its net profit, calculated under International Financial Reporting Standards (IFRS) over the last five years allocated to dividends, business daily Vedomosti reported Monday quoting the Association of Institutional Investors’ data.

The association’s Executive Director Alexander Shevchuk said that Rostelecom is the only state-participated company whose dividends are tied to a free cash flow, which is “certainly welcomed by investors”.

Rostelecom approved a new dividend policy in November 2015 and plans to pay owners of its common shares at least 75% of cash flow during three years, or at least 45 billion rubles. Owners of preferred shares can count on 10% of the net profit calculated under Russian Accounting Standards (RAS) as the law puts it.

Shevchuk hopes other state companies to follow Rostelecom’s suit. Boards of directors should pay more attention to the yield of investment programs and effectiveness of debt management to maximize free cash flow, he said.

Most state companies have accumulated undistributed profits exceeding 6.6 trillion rubles allowing them to pay dividends above their RAS profit.

Gazprombank analyst Sergei Vasin said Rostelecom borrowed its dividend policy idea from cellular operators. The yield of Rostelecom’s common stocks is still below the yield of mobile operators, but is better than that of power companies, the analyst said.

(68.4026 rubles – U.S. $1)

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