Norilsk Nickel plans to pay 140 billion rubles. dividends

For nine months of this year, Norilsk Nickel plans to pay 140 billion rubles. dividends. In addition, the company intends to carry out a split (splitting) of shares with a factor of 100. The splitting process will take several months and is intended to maintain the liquidity of the shares. According to analysts, the impact on stock liquidity will be short-term, since Norilsk Nickel will not be able to offer a high dividend yield in the next year and a half.

Proposals to pay dividends and split shares will be considered at an extraordinary meeting of Norilsk Nickel shareholders on December 7, reported company. The board of directors of Norilsk Nickel recommended paying dividends for nine months in the amount of 915.33 rubles. per share.

In total, the company proposes to pay 140 billion rubles, or $1.5 billion.

Norilsk Nickel in April refused from paying dividends for 2022 due to increased geopolitical risks that negatively affected financial results. However, the company did not rule out the possibility of an interim dividend if cash flow is generated and the company maintains a comfortable level of debt.

“We have repeatedly stated that, from the point of view of the company’s management, the necessary conditions for paying dividends are a sufficient amount of free cash flow and a comfortable level of debt load,” explains Sergei Malyshev, senior vice president and financial director of Norilsk Nickel. “Good results for the nine months of 2023.” “enabled the board of directors to recommend the payment of interim dividends.” The company did not disclose financial results for nine months, and in the first half of the year, under the influence of low prices, its EBITDA decreased by 30%, to $3.4 billion. The company’s investment program for 2023 will amount to 300 billion rubles, Norilsk Nickel reported.

Norilsk Nickel’s largest shareholders are Vladimir Potanin’s Interros with a 37% share and Rusal with a 26.4% share.

The stock split will be carried out with a factor of 100. The split itself will take several months and will not affect the recommended dividends. Shares in securities accounts of depository programs will also be fragmented.

“Currently, the price of one Norilsk Nickel share exceeds the average price of shares of the main blue chips by several dozen times, which makes it difficult for a significant number of retail investors to buy them. The crushing program, or split, does not have a direct impact on the price of shares, but increases their availability for a wide range of retail investors, leads to increased liquidity and reduced volatility,” said Mr. Malyshev.

At the time of writing, Rusal, which often acts in opposition to the main shareholder, did not comment on the share split.

According to analysts of the Telegram channel “My Investments”, the stock split will not have a big impact on liquidity. Due to export duties, lower prices for Norilsk Nickel’s base metals and a large-scale investment program, the company will offer a modest dividend yield in the next year and a half, analysts say (Norilsk Nickel shares are traditionally bought mainly based on dividend payments).

Declared dividends in the amount of 915 rubles. per share exceeded expectations, comments the investment bank Sinara. “Together with the news about the upcoming stock split, the dividend recommendation should support the company’s quotes in the short term,” analysts at the investment bank believe.

Evgeniy Zainullin