25 Feb 2020 18:41

Gazprom Neft to pay 50% of IFRS earnings as H2 2019 dividends - CFO

MOSCOW. Feb 25 (Interfax) - Gazprom Neft will pay 50% of net profit to International Financial Reporting Standards (IFRS) as the remaining dividends for 2019, in other words H2 2019 dividends, the oil company's CFO Alexei Yankevich said on a conference call.

Yankevich said the board of directors at one of its latest meetings decided to make the switch to paying half of the profit as dividends, so all decisions reached in 2020 will be based on that principle. They include the decision on the H2 2019 dividend.

Parent company Gazprom's decision to convert all subsidiaries that are not wholly owned to payment of 50% of IFRS net profit for as soon as 2019 means Gazprom Neft shareholders can expect a dividend of 19.53 rubles per share for H2 2019, according to Interfax's calculations, based on the oil company's reporting. No adjustments were used for the calculation.

Gazprom Neft has net profit of 185.162 billion rubles for H2 2019. It has 4.741 billion issues shares.

Its shareholders accepted a dividend of 18.14 rubles per share for H1 2019 or 40% of IFRS earnings for the period.

Gazprom owns just over 95% of Gazprom Neft. Gazprom planned to achieve the targeted 50% of group profit to IFRS within three years.

"We did indeed decide to move to 50% dividends at one of the latest board meetings. This means all decisions that will be reached regarding dividends in 2020 will be reached in keeping with the 50% guidance. Dividends for H1 2019 have already been announced, so the dividends for H2 2019 will be 50%," Gazprom Neft's Yankevich said.

Gazprom Deputy CEO Famil Sadygov said in February that Gazprom's adoption of the new dividend policy "increased the importance of centralizing the parent company's liquidity." "In connection with this, the management board decided that subsidiaries where Gazprom has less than a 100% stake will pay at least 50% of net profit as soon as the first year. The decision concerns 2019. In 2020, all Gazprom subsidiaries will allocate 50% of net profit to IFRS for 2019 dividends, payments for 2019 will start as soon as 2020," Sadygov said.