AFK Sistema adopted a new dividend policy for 2021-2023

Analysts expect Sistema shares to grow by 117%

The Russian stock market has recently been distinguished by positive news: a new historical maximum for the Moscow Exchange index, Gazprom soared by 50% in three weeks, NLMK exceeded ArcelorMittal in value. Should we expect continued growth and what do analysts recommend buying?

Photo: Sergey Savostyanov/TASS

AFK Sistema shares have good prospects, according to VTB Capital analysts and recommend the stock for purchase. Growth potential - 117%.

Sistema is trading at a discount of more than 60%, analysts estimate. The company can increase in value by monetizing its assets. Sistema may sell its controlling stake in Detsky Mir, and in the long term, an IPO of some assets, including Medsi, is very likely.

The current situation is good for the Russian stock market; it has a high dividend yield, and part of the dividends will most likely be reinvested back into the market, says Sergei Suverov, senior analyst at BCS Premier.

Sergey Suverov, senior analyst at BCS Premier “As for AFK Sistema, the company is, first of all, cheap relative to the sum of its parts and from the point of view of cheapness is really attractive. This is a set of rather unique assets: not only MTS, but also various other projects - development business, pulp and paper assets and many others. And an additional driver for the growth of Sistema shares could be the sale of Detsky Mir shares at fairly good multiples for the company. But there are also risks associated with the possibility of some kind of personal sanctions against the owner of AFK Sistema, as well as with the fact that the dividend yield of AFK Sistema itself is lower than the average yield of the Russian stock market.”

On the other hand, the ruble traditionally weakens in the summer, and therefore ITI Capital recommends buying dollars. Growth potential is 3% against the ruble.

Some domestic Russian factors are putting pressure on the ruble. For example, purchases of currency by the Central Bank on behalf of the Ministry of Finance as part of the budget rule increased. Plus, summer is the time for Russian companies to pay dividends, and part of these dividends, quite significant, is also converted into dollars.

But the main thing that will determine the behavior of the dollar against the ruble is how the dollar will behave against other currencies, explains Sergei Romanchuk, head of operations on the foreign exchange and money markets of Metallinvestbank.

Sergei Romanchuk, head of operations of Metallinvestbank in the money and foreign exchange market “All other things being equal, the ruble may weaken somewhat due to internal factors, but I do not expect any great volatility in the coming months. If you need to buy currency and this is not speculation, but a conscious risk-free position, then you can buy currency now. As for the possible speculative play, if you look at the longer-term picture, the ruble still has quite good prospects from a fundamental point of view. Despite moderate economic growth, we have and will continue to have very high real interest rates. The Central Bank may well cut rates by a quarter at its meeting next week. But this will still maintain a fairly high potential and attractiveness of the ruble for carry trade. If you make a decision for the long term, then you can stay in the ruble. "The weakening that may occur in the summer will most likely not be large enough to be translated into dollars."

These are forecasts, but the facts are as follows: the day before, VTB shares became the growth leaders, adding 4%. Over the month, the bank's quotes increased by 9%.

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Dividends on shares of AFK Sistema in 2021 - size and date of closure of the register

Home → Dividends→ Shares Sistema JSC - forecast, payment history

A table with the complete history of dividends of the AFK Sistema company, indicating the amount of payment, the date of closure of the register and the forecast:

*Note 1: The Moscow Exchange operates on the T+2 trading system. This means that settlements for buying and selling shares occur within 2 business days. Therefore, to be included in the register of shareholders and receive dividends, you must be a shareholder 2 days before the cutoff.

*Note 2: Exact payout date varies by broker and issuer. The predicted nearest date for receipt of dividends to the brokerage account for the company Sistema JSC: July 31, 2021.

Total dividends of Sistema JSC shares by year and changes in their size compared to the previous year:

The amount of dividends paid by Sistema JSC for the entire period is 7.6136 rubles.

Average amount for 3 years: 0.183 rubles, for 5 years: 0.43 rubles.

DSI indicator: 0.79.

You can buy Sistema JSC shares with minimal commissions from stock brokers: Finam and BCS. Free deposits and withdrawals. Online registration.

Brief information about the issuer AFK Sistema PJSC JSC

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Calendar with upcoming and past dividend payments

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All company dividends for the last 10 years

AFK Sistema began paying dividends on May 17, 2008. Since that time, the company has been steadily accruing profits to security holders. Below is a table that allows you to evaluate how dividend earnings for shareholders have changed.

TMK

TMK TRMK

(TRMK security ticker)

«Pipe Metallurgical Company

» is a Russian metallurgical company, the largest Russian pipe manufacturer, one of the three leaders in the global pipe business.

A very serious company, on November 25 this year it entered the TOP 50 among the best employers according to Forbes magazine. And already on November 26, together with the company Rosstelecom, we began creating a center for monitoring and responding to cyber attacks ( not a core area, but relevant

). In fact, the products are in great demand in industry - everyone always needs pipes.

• Registry closing date 07.12.2020
• The payment amount per share is 3
  rubles.
• The current, approximate share price is 68.3
  rubles.
• Profitability 4,39
  %

How to buy shares and receive dividends

To buy AFK Sistema securities, you must open a trading account with one of the licensed Russian brokers.

This is a simple process, and many brokerage companies now provide the opportunity to open an account online using the State Services portal.

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Warning about Forex and BO

Expert opinion

Vladimir Silchenko

Private investor, stock market expert and author of the Capitalist blog

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All binary options presented in Russia are like bets on red and black. In this case, the client plays against the Internet resource, and no real transactions with exchange instruments are carried out there. Therefore, investors should not get involved with such pseudo-financial kitchens.

Forex is an over-the-counter market. There is a minimum number of licensed forex dealers in the Russian space. Most offices operate illegally, through registration in other jurisdictions. Here the game is also played against the counterparty who allegedly provides you with financial services.

Therefore, it is worth working exclusively through brokers with appropriate licenses who conduct real transactions on the stock exchange.

AFK's debt load

The financial liabilities of the AFK corporate center as of September 30, 2021 amounted to 228.1 billion rubles. This figure decreased by 3.7% compared to the level as of June 30, 2021 (then the financial liabilities of the corporate center amounted to 236.9 billion rubles).

Earlier, the president of the corporation, Andrei Dubovskov, said that Sistema would strive to reduce its debt to a level of 160-190 billion rubles by the end of 2021.

Later, Yevtushenkov reported that the corporation was unable to reduce its debt burden to 190 billion rubles at the end of 2021 for a number of reasons, in particular due to the lack of a deal to sell a controlling stake in Detsky Mir.

AFK Sistema increased revenue to ₽777 billion. What to do with shares

AFK Sistema's revenue for 2021 increased by 12% year-on-year, amounting to more than RUB 777 billion, the company reported. Adjusted net profit decreased by 73%, to RUB 1.1 billion. Revenue growth was facilitated by an increase in income in the company’s key assets. The mobile operator MTS, owned by Sistema, has seen an increase in the consumption of data services and revenues from new directions. Another large division, the Detsky Mir chain of stores, was opening new stores and increasing online sales.

Sistema’s net debt at the end of the year amounted to RUB 213.4 billion, an increase of RUB 0.3 billion compared to the end of the third quarter of 2021. The day before it became known that the company opened a credit line of ₽10 billion with Sovcombank for three years to refinance the debt. Market experts considered this news neutral for quotes.

What the market valued

Sistema’s financial results in the fourth quarter of 2018 turned out to be quite successful, says stock market expert Sergei Sidilev. In particular, revenue and adjusted OIBDA exceeded analysts' consensus estimates by 4.4% and 27%, respectively.

“The excess of adjusted OIBDA over the forecast is due to the results of non-public assets that managed to demonstrate strong results,” the expert noted. We are talking about the timber industry holding Segezha Group, the Medsi clinic chain and real estate companies Leader-Invest and Business Real Estate.

On Wednesday morning, AFK Sistema's quotes increased by more than 1.5%. The reason could be the company’s results for the fourth quarter, General Invest analyst Tatyana Simonova believes.

However, the key factor for the growth of the company's shares remains the reduction of the debt burden, Sidilev is convinced. “At the end of 2018, the company failed to meet forecasts for debt repayment of up to ₽160-190 billion,” the expert stated. The volume of refinancing in 2021 will be about ₽60 billion, and the company calls ₽140-150 billion a comfortable level of debt for itself, Simonova added.

What awaits the company

Even before the release of IFRS results, the market reacted to the announcement of a number of large transactions involving the sale and purchase of shares. This led to minor changes in the structure of the company, noted Andrey Lyushin, Deputy Chairman of the Board of Loko Bank.

“Investors are now reacting to the increasing attractiveness of the segment. Thanks to the transactions that have happened (the sale of 51% of the shares of Leader-Invest JSC in favor of the Etalon Group and the further acquisition of 25% of the Etalon Group), it becomes possible to create a player that will enter the top 3 in the real estate markets of Moscow and St. Petersburg,” says Lyushin .

At the same time, the group is increasing its influence in the pharmaceutical business - its medium-term goal is to enter the top 5 Russian drug manufacturers by merging companies, Loko Bank said.

What you need to know about dividends

The Board of Directors of Sistema recommended using just over RUB 1 billion of retained earnings from previous years to pay dividends based on the results of 2021. The company decided not to distribute the remaining profits from previous years after payment. The yield will be moderate and amount to 1.2%, representatives of Loko Bank and General Invest agreed.

“Neither Sistema’s results nor its small dividends are a surprise to the market. Let us recall that Sistema receives the lion's share of OIBDA profit from MTS, which reported on March 19. The [cellular operator's] results exceeded market expectations. As for Sistema’s dividends, unlike MTS, the holding has not been paying large dividends in recent years, since the company’s priority is to reduce its debt burden,” stated Tatyana Simonova.

For this reason, quarterly results will have a strong impact on the dynamics of Sistema shares. “But the sale of a stake in Detsky Mir, which will reduce the debt burden, could push the shares up,” summarized a representative of General Invest.