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:

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.

Regulations on the Dividend policy ofPJSC ALROSA

This page was last updated on 27 August 2013 at 14.24