Dividend Policy and Profit Distribution
Subject to the Dividend Policy of Transneft (hereinafter referred to as the Policy), the following principles shall be observed when determining the amount of dividends paid out for shares of all categories (kinds):
- transparency of dividend amount determining procedure;
- unconditional accomplishment of the Company’s primary objectives stipulated in the Articles of Association, including investment activities for the development of the operational assets, expansion, revamping and technical upgrading of the trunk pipeline system;
- focus on enhancing the Company’s investment appeal;
- ensuring of financial stability and minimisation of eventual possible negative effects on the Company’s credit ratings;
- consideration of the amount of dividends on shares of all categories (kinds) when calculating tariffs for oil trunk pipeline transportation services set by the Federal Antimonopoly Service;
- sufficiency of the funds available to the Company and obtained from rendering services of oil and petroleum products transportation via trunk pipelines, with regard to the set values of tariff indexation, to finance operational, investment and financial activities.
Pursuant to the approved Policy, the base level of dividend payments amounts to 25% of the consolidated net profit for the reporting year calculated under IFRS and normalised taking into account the share of profit in subsidiaries and jointly controlled companies; income gained from revaluation of financial investments; exchange rate positive balance and other irregular (non-recurring) nonmonetary components of the net profit.
The total amount of dividends is distributed between the categories (kinds) of the Company’s shares pursuant to the Company’s Articles of Association and requirements of the relevant Russian laws.
April 2017 saw amendments registered in Transneft’s Articles of Association regarding the amount of dividends on preferred shares. The new version specifies that 10% of the Company’s net profit for any particular year is to be paid as dividends on all preferred shares. Nevertheless, the dividend paid on one preferred share cannot be less than the dividend paid on one ordinary share.
According to Oder of the Federal Agency for State Property Management No. 406-r dated 30 June 2019, the dividends totalling RUB 77,611,103,690.85 were paid for 2018, including:
- RUB 10,705.95 per one ordinary share (5,694,468 shares), amounting to RUB 60,964,689,684.60 in total;
- RUB 10,705.95 per one preferred share (1,554,875 shares), amounting to RUB 16,646,414,006.25 in total.
The dividends resulting from the 2018 performance were paid in full and within the timeframe prescribed by the applicable Russian laws. As of 31 December 2019, Transneft has no dividend debt due to the federal budget.
|Name||2017 (for 2016)||2017 (interim, based on 1H 2017 results)||2018 (for 2017)||2019 (for 2018)|
|Share category, RUB per share||Ordinary||4,296.48||3,875.49||7,578.27||10,705.95|
|Total number of shares||7,123,623||7,123,623||7,249,343||7,249,343|
|Total amount of dividends, RUB||30,606,503,747.04||27,607,496,252.96||54,937,478,576.61||77,611,103,690.85|
|Dividend payout ratio from normalised net profit of Transneft under IFRS||18.3%||50%||51.2%|
|Resolution on dividend payment||AGMS dated 30 June 2017||EGMS dated 30 August 2017||AGMS dated 30 June 2018||AGMS dated 30 June 2019|
The amount of dividends paid included dividends paid out from the retained earnings of the previous years
Dynamics of the TSR indicator (total shareholder return) for preferred shares
|5 years (2015-2019)||63.7%|
|Name||2017 (for 2016)||2018 (for 2017)||2019 (for 2018)|
|Retained profit (loss) in the reporting period (RUB million), including:||30,606.5||58,843.6||10,110.9|
|Dividends paid, RUB million||30,606.5||58,843.5||10,110.9|
|Reserve fund replenishment, RUB million||0.02|
|Kept at Transneft’s disposition, RUB million||0.06||0.036|