TMK management expects no quarterly dividend payments soon

ST. PETERSBURG, Jun 7 (PRIME) -- The management of Russian oil and gas pipe producer TMK does not expect the company to start paying quarterly dividends soon, and does not expect changes to the dividend policy after acquisition of Chelyabinsk Pipe Plant (ChelPipe), Vice President for Strategy Vladimir Shmatovich told reporters on Monday.

“Speaking of dividends, the integration and synergy plan after acquisition of the new assets has not been optimized yet, but I don’t think that we will change the dividend policy. It is rather flexible now, it is tied to the net profit, this is why we expect no changes to be made to the dividend policy soon,” he said.

TMK Previously paid 9.67 rubles per share, or a total of 9.990 billion rubles, in dividends for 2020.

The company is now focused on debt reduction since it spent its own and borrowed money to buy ChelPipe and as the acquired asset also has debts. The shareholders should not expect dividends similar to what the company paid for 2020. “It is obviously for the shareholders to decide, and we hope that the dividend paid for the previous year created a cushion for them, but we definitely don’t expect payments of interim dividends per each quarter,” he said.

TMK plans to maintain a public status, but it doesn’t have the goal of expanding its free-float. The shareholders should decide whether the free-float should be expanded or not, but the company is very unlikely to issue new shares only to raise free-float, he said.

It is unreasonable for the company to return to the London Stock Exchange after delisting.

“Several years ago, investors decided that  the Moscow Exchange is a nontransparent and difficult institution that does not meet the Western global standards, and mainly Russian residents traded there, but the work done by the central bank and the bourse made a significant change. The Moscow Exchange now meets almost all standards to which large investors are accustomed. We polled our investors, and more than 90% of them have no problems with trading on the Moscow Exchange. … We don’t have to go to London to attract global investors, they trade in Moscow,” he said.

Shmatovich also said that TMK expects its capital expenditures to exceed U.S. $200 million per year slightly in 2021 and in the several coming years following acquisition of ChelPipe. The company doesn’t need to raise expenditures as it now does not lack production capacities. Its facilities are up-to-date and need no upgrades.

In general, the synergy from ChelPipe acquisition will be higher that the initially estimated figure of 10% of TMK’s earnings before interest, taxes, depreciation, and amortization (EBITDA) in 2021, but TMK will still continue work to improve synergy, he added.

Dmitry Pumpyansky, chairman of the board of directors, is the main beneficiary owner of the company.

(73.2721 rubles – U.S. $1)

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