3 Nov 2023 13:28

Nornickel could pay 915.33 rubles/share in dividends for 9M - company

MOSCOW. Nov 3 (Interfax) - The Nornickel board has recommended paying dividends for 9M 2023 totaling 915.33 per ordinary share, the company said in a statement.

The dividend record date will be December 26.

In total, the company will transfer about 140 billion rubles to shareholders.

The share split simultaneously announced by the company will not affect the payment of dividends recommended by the board, Nornickel's CFO clarified: the split program will take several months.

"We have repeatedly stated that from management's point of view, sufficient free cash flow and a comfortable level of debt are the prerequisites for the payment of dividends. Sound results for 9M 2023 enabled the board to recommend payment of interim dividends," said Sergey Malyshev, Senior Vice President and Chief Financial Officer of Nornickel.

At the same time, he noted that new challenges await the company next year "both in the expenditure (rising inflation and the introduction of export duties) and revenue (overhaul of the weighted smelting furnace at the Nadezhda Smelter and difficult commodity market conditions) parts of the budget."

"In these circumstances, maintaining financial stability will remain a clear priority for us," the CFO said.

The company is now at the peak of its investment expenditures: the plan for 2023 includes an investment program of more than 300 billion rubles, Malyshev noted. The company's largest project is the Sulfur Program, which was launched on October 25 in Norilsk. Its first stage at the Nadezhda Smelter is estimated at 180 billion rubles.

Nornickel did not pay final dividends for 2022, citing increased geopolitical risks and new challenges for its operating and sales activities, as well as for the successful implementation of strategic projects. At the same time, the company did not rule out paying interim dividends in case of positive FCF and maintaining debt at a comfortable level (a debt ceiling at 2x).

An important factor of payments is the release of working capital. At the end of last year, working capital increased by $2.8 billion (to $4 billion), including due to the build-up of metal inventories caused by failures in logistics chains (the company estimated the impact of this factor at $1.1 billion, while the rest was due to changes in financing mechanisms). In H1, working capital decreased by 20% to $3.2 billion, mainly due to the weakening ruble exchange rate and lower accounts receivable.