UPDATE: Russia’s Lukoil to keep dividend policy for 2014 unchanged

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MOSCOW, Mar 3 (PRIME) -- Russian oil major Lukoil sees no reason to change its dividend policy and kept plans to pay more in dividends for 2014 than for 2013, Vice President Leonid Fedun said during a conference call on Tuesday.

“We maintain our position that dividends will be higher than in 2013. And the first interim dividends which we paid at the beginning of this year were 20% higher than dividends for 2013… At the moment we see no serious reasons which would prevent us from paying the dividends which were planned by the board of directors and which will be significantly higher than dividends for 2013,” he said.

Lukoil paid dividends “in the in most difficult period when oil prices slumped and market was absolutely unstable,” Fedun also said.

Lukoil’s performance will not be affected significantly even if dividend payouts account for 50% of its net profit, Fedun said.

“Although we are optimistic about the oil market, we believe that the company must maintain its effectivity in the context of its investment program and dividend payouts even with the (oil prices) level of U.S. $40 per barrel. We are going to increase dividend payouts; moreover, we are not afraid of writing off… Dividend payouts may reach to 50% of our profits,” he said.

Lukoil’s net profit decreased 37.5% on the year to $4.746 billion in 2014 due to non-cash losses connected with asset impairment in Russia, Ukraine, Western Africa and Kazakhstan, as calculated under U.S. GAAP, the company said in a statement.

Lukoil’s dividends for January–September 2014 were earlier approved at 60 rubles per share. In 2013, Lukoil paid 50 rubles per share in dividends for January–June, while total dividends for the year amounted to 110 rubles per share or 93.561 billion rubles.

Dividends on the results of 2014 are likely to grow as much as 15% against the last year’s level.

Lukoil plans to keep its 2015 dividend policy at the 2014 level, CEO Vagit Alekperov said in January.

The company’s dividends cannot be lower than 15% of a net profit calculated under International Financial Reporting Standards (IFRS).

(62.2248 rubles – U.S. $1)

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