State cos could pay less than 50% of profit as dividends in isolated cases - Energy Ministry
MOSCOW. Oct 4 (Interfax) - The Russian government could allow state companies to pay less than half their net profit as dividends in isolated cases, the Energy Ministry's press office said, quoting Yury Manevich, a deputy energy minister.
"The government has adopted a conceptual decision for state companies to pay 50% of their net profit to International Financial Reporting Standards (IFRS) as dividend. There could be isolated cases where the amount could be adjusted due to the need to carry out an extensive investment program," Manevich said.
The Energy Ministry wants "to make it possible for the corresponding amount to be paid by improving efficiency and long-term regulatory decisions."
The dividend policy of state companies is governed by government resolution No. 774-R from May 29, 2006, in accordance with which they must pay shareholders no less than 25% of profit in the form of dividends. In recent years, the Finance Ministry and the Economic Development Ministry have on numerous occasions insisted on raising the threshold to payment of 50% of profit. The MinFin has now revisited this issue. "Most likely, we will again come out with a proposal to make changes to the government resolution to set down these 50% [of profit for state company dividends]," Deputy Finance Minister Alexei Moiseyev said in an interview with Interfax in September.
"The Energy Ministry's position is that we are categorically opposed," Manevich said separately on October 3, when asked about this position on the Finance Ministry's proposal.
"We believe that we should discuss the matter of the sector's development separately," he said, noting that Rosseti has social obligations in certain regions, such as the Caucasus, that the company has federal-level tasks before it." "We look at all of this comprehensively," Manevich said.
"We believe it would be incorrect to set up some special procedures for Rosseti ," he said. "We also have other companies with government participation, for example, RusHydro ," the deputy minister said.
"This is the approach which we hold to with respect to companies with state participation [in the energy sphere]," he said.