MMK to continue adhering to approved dividend policy, keep link to FCF - CEO
MOSCOW. July 15 (Interfax) - Magnitogorsk Iron & Steel Works will continue adhering to its approved dividend policy tied to free cash flow, the company's CEO Pavel Shilyaev said in an interview with Interfax.
"We are sticking to the decision at the moment that we are not revising our dividend policy. And, speaking of dividends and capex within the framework of that public discussion that has been going on since the end of last year and those messages from the government that have been in the press - we will stick to the same approach," he said.
In 2019, MMK approved changes to dividend policy according to which the company directs all free cash flow to dividends when the net debt/EBITDA ratio is within 1x. If the net debt/EBITDA ratio is greater than 1x, dividends will be paid in the amount of at least 50% of FCF.
The company's CEO also confirmed planned investments for 2021 at $1.05 -1.1 billion, compared to about $700 million a year earlier.
"In 2020, capex was held back by the pandemic, by border closures. But the uncertainty when we were waiting and analyzing the situation did not last long: by June-July 2020 it became clear that everything had stabilized in terms of global trends, changes in general trade rules, the same restrictive measures," Shiliaev said. "Therefore, we entered 2021 with a certain lag in relation to our plans. Since our projects have a high IRR and the goal is to put them into operation as quickly as possible, we are now trying by all means to catch up with the pace. As much as we are allowed, including by our partners," he said.
