Dividend Policy
The Company’s Dividend Policy was approved by the Supervisory Board on 6 August 2018. The updated Dividend Policy was approved on 24 June 2019 to adjust the methodology for determining the amount of dividends.
The policy seeks to provide maximum transparency for shareholders and all stakeholders on the Company’s capital allocation strategy.
Semi-annual dividends
Dividends are paid twice a year – for the first half and for twelve months of the year, net of dividends for the first six months paid previously.
FCF-based dividends
In line with the updated dividend policy, free cash flow1 (FCF) representing the operating cash flow net of capex is used as a new basis for calculating dividends.
Depending on the Net Debt2 / EBITDA3 ratio, the Supervisory Board recommends the following semi-annual dividend payout ratio based on the FCF for the respective six months of the reporting year:
- more than 100% of the FCF: if the Net Debt / EBITDA ratio as at the end of the first half of the year or as at the end of the year is below 0.0x;
- 100% of the FCF: if the Net Debt / EBITDA ratio as at the end of the first half of the year or as at the end of the year is within the range of 0.0x to <0.5x;
- 70%–100% of the FCF: if the Net Debt / EBITDA ratio as at the end of the first half of the year or as at the end of the year is within the range of 0.5x to <1.0x;
- 50%–70% of the FCF: if the Net Debt / EBITDA ratio as at the end of the first half of the year or as at the end of the year is within the range of 1.0x to 1.5x.
Minimum dividend payout ratio
If the actual and target Net Debt / EBITDA ratio is below 1.5x, a minimum dividend of 50% of IFRS net income is paid for the respective period.
Note:
1 Free cash flow (FCF) is the operating cash flow calculated in accordance with the International Financial Reporting Standards (IFRS) net of capital expenditure (posted as Purchase of Property, Plant and Equipment in the consolidated IFRS statement of cash flows).
2 Net debt is calculated on an IFRS basis as the amount of debt less cash and cash equivalents as well as bank deposits at each reporting date.
3 EBITDA stands for earnings before interest, taxes, depreciation and amortisation calculated for the past twelve months on an IFRS basis.
Dividends, Dividends per share1 and Payout ratio
| Year | Period | Dividend per share, RUB1 | Declaration date | Amount, RUB m |
As a % of Net Income | As a % of Free Cash Flow (FCF) |
| 2018 | 2H 2018 | 4.11 | 23.04.2019 (date of Supervisory Board recommendation) |
30,270 | - | 100% |
| 1H 2018 | 5.93 | 30.09.2018 | 43,674 | - | 70% | |
| 2017 | Full year | 5.24 | 26.06.2018 | 38,592 | 50% | 52% |
| 2016 | Full year | 8.93 | 30.06.2017 | 65,769 | 50% | 59% |
| 2015 | Full year | 2.09 | 30.06.2016 | 15,392 | 50% | 37% |
| 2014 | Full year | 1.47 | 25.06.2015 | 10,826 | 2 | 26% |
| 2013 | Full year | 1.47 | 28.06.2014 | 10,826 | 35% | 70% |
| 2012 | Full year | 1.11 | 29.06.2013 | 8,175 | 24% | 68% |
| 2011 | Full year | 1.01 | 30.06.2012 | 7,439 | 28% | 27% |
| 2010 | Full year | 0.25 | 30.06.2011 | 1,833 | 16% | 7% |
| 2009 | Full year | 0.03 | 26.06.2010 | 250 | 7% | 0.02% |
1 Restated to account for the share split which occurred in 2011
2 According to the IFRS consolidated financial statements of OJSC ALROSA and its subsidiaries for the year ended 31 December 2014, the loss for the year was RUB 16,832 m. The loss was due to the revaluation of debt denominated in US dollars. According to the accounting (financial) statements of OJSC ALROSA, the Company’s net income for the year totalled RUB 23,469 m. The shareholders at the annual General Shareholders’ Meeting resolved to pay dividends based on the Company’s 2014 results in absolute terms at the level of dividends paid for 2013 which amounted to 46% of net income calculated in accordance with the Russian accounting standards.
FAQ
Question: Who decides on the amount of dividend payments?
Answer: The amount of dividends is approved by the General Shareholders’ Meeting based on the recommendation of the Company’s Supervisory Board.
Question: How can I contact the shareholder relations department?
Answer: E-mail: shareholders@alrosa.ru Tel.: +7 495 745 5876
Question: How is the dividend record date determined?
Answer: The record date (“cut-off” date) is determined by a resolution of the Supervisory Board. However, in accordance with Russian laws, it cannot be earlier than 10 days and later than 20 days after the declaration of dividends.
Question: When can I receive the dividends?
Answer: Dividends to a nominee shareholder or a trustee acting as a professional securities market participant listed on the Company's shareholder register shall be paid within 10 business days after the dividend record date, and dividends to other persons listed on the Company's shareholder register shall be paid within 25 business days after the dividend record date.
Question: Are dividends taxed?
Answer: According to Russian laws, dividends are subject to tax. The tax rate is 13% for dividends received by corporate and individual shareholders that are residents of the Russian Federation and 15% for corporate and individual shareholders that are non-residents.