13 Feb 2024 14:46

Aeroflot confirms position to pay out dividends only once attaining 'sustainable' net profit

MOSCOW. Feb 13 (Interfax) - Aeroflot plans to return to the matter of paying out dividends once "sustainable" net profit has been achieved, Andrei Napolnov, Aeroflot's director of investor relations and capital markets, said during a Sber CIB webinar.

"We must initially return to organic profit without revaluations and without one-time effects, meaning to profit from which dividends could be paid when this does not adversely affect the company. After all, would it be in the interest of shareholders to pay out dividends for the sake of dividends, when this would worsen the company's credit profile or undermine financial stability? Obviously not, thus achieving sustainable net profit first of all," Napolnov said.

Aeroflot's dividend policy stipulates paying out 25% of net profit to International Financial Reporting Standards (IFRS) for the previous year. Meantime, 50% of profit has been paid out "in recent years, before all the complications, when the company had a net profit," Napolnov said. The source of payments has been profit to IFRS and to Russian Accounting Standards (RAS).

Aeroflot on Monday reported a net loss of 29.5 billion rubles to RAS in 2023 versus a loss of 14.3 billion rubles in 2022, and reported adjusted net profit of 50.5 billion rubles prior to forex revaluations in the reporting period versus an adjusted loss of 40.4 billion rubles the previous year.

Aeroflot last reported to IFRS for 9M last year, with the group posting a net loss of 111.3 billion rubles versus profit of 62 billion rubles the previous year. Profit adjusted for the exchange rate effect was estimated at 18.3 billion rubles against a loss of 2 billion rubles for the same period the previous year.

Aeroflot last paid dividends for 2018, allocating 2.6877 rubles per share, totaling 2.857 billion rubles, or 50% of net profit to IFRS.

Napolnov previously spoke on the topic of returning to dividend payments upon attaining positive financial results. "Financial stability is important in the current situation; therefore it is important to account for this factor when deciding on dividends. Nevertheless, it is too soon to talk about dividends, because we need to achieve positive financial results," Napolnov said when speaking during the Tinkoff Investments-organized "Greedy Investor" podcast in December.

Aeroflot is Russia's largest aviation group that unites the flagship airline of the same name and Pobeda Airlines and Rossiya Airlines. The government controls 73.8% of Aeroflot's shares, 1.2% are quasi-treasury shares, company management holds 0.0001%, and 25% of the shares are in free float on the Moscow Exchange.