MMK may remain in the MSCI Russia index thanks to FCF growth in the 3rd quarter and record dividends

When making recommendations on the size of dividends, the Board of Directors is guided by the following principles: - Provided that the net debt/EBITDA ratio calculated from the consolidated financial statements is below 1.0x, the amount of funds allocated for the payment of dividends, as a rule, will be be at least 100% of free cash flow calculated on the basis of the consolidated financial statements of PJSC MMK, compiled in accordance with international financial reporting standards;

— If the “net debt/EBITDA” ratio exceeds 1.0x, the amount of funds allocated for the payment of dividends, as a rule, will be at least 50% of free cash flow, calculated on the basis of the consolidated financial statements of PJSC MMK, compiled in accordance with with international financial reporting standards.

When developing recommendations on the amount of dividends, the Board of Directors of the Company may use indicators other than free cash flow, calculated on the basis of the consolidated financial statements of PJSC MMK, compiled in accordance with international financial reporting standards. Such indicators can be used: net profit, determined on the basis of the consolidated financial statements of PJSC MMK, compiled in accordance with international financial reporting standards, or net profit, determined on the basis of the accounting (financial) statements of PJSC MMK, compiled in in accordance with Russian accounting standards.

"Magnitogorsk.met.comb" JSC

Cumulative dividends in the next 12m: RUB 5.01. (forecast) Average dividend growth rate 3y: n/a Nearest dividends: RUB 0.945 (1.8%) 06/17/2021 (forecast)

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Total payments by year

YearDividend (RUB)Change to previous year

All payments

Dividend declaration date Register closing date Year for dividend accounting Dividend

All dividends

Profit forecast next. 12m: 51430.29 million rub. Number of shares outstanding: 11174.33 million. Stability of payments: 0.86 Stability of growth: 0

Important

To get into the register, you need to buy securities two trading days before the closing date of the register. Then the date of delivery of shares under the concluded transaction will coincide with the date of registration of the register.

If the shareholders' meeting has not yet taken place, the table shows the amount of dividends per share recommended by the board of directors. A predicted value may also be provided. Dividend yield is calculated based on the closing quote of the previous trading day (if the closure of the register has not yet taken place) or two days before the cutoff.

When will dividends be paid in 2021?

The register fixation date for identifying shareholders entitled to receive dividends for the 1st half of 2021 is set for 10/15/2019.

But in order to be included in the list of applicants for payments, you must be a shareholder of MMK as of the close of trading on October 12, 2019. This is due to the fact that the Moscow Exchange operates according to the “T+2” format (i.e. trading day + 2 business days ) and information about holders is transmitted with a short time gap.

The estimated closing date of the register for dividends based on results for 9 months will be set for December 18-20, 2019.

After fixing the register of shareholders, funds are transferred to investors' accounts in 1-4 weeks.

Key reporting points

Revenue. The indicator increased on a quarter-on-quarter basis due to increased sales volumes and rising steel prices in Russia and around the world. However, it decreased on a year-on-year basis due to worsening market conditions and the planned reconstruction of the 2500 g/p mill.

EBITDA. The indicator increased compared to the previous quarter due to an increase in sales profitability against the backdrop of rising volumes and positive dynamics of steel prices in the main markets. However, on a year-on-year basis, the figure fell due to the pandemic and its negative impact on business activity and steel prices.

Net profit. The indicator jumped more than 3 times compared to the previous quarter, mainly due to increased profitability indicators and positive exchange rate differences. At the end of the year, the figure decreased significantly, again due to the negative impact of the pandemic.

Free cash flow. During the quarter, it decreased compared to the previous quarter due to increased capital investments and seasonal accumulation of raw material reserves. In addition, purchasing prices have increased. FCF also decreased at the end of 2021 on an annual basis, reflecting the deterioration of the global macroeconomic situation.

“Net debt/EBITDA” amounted to -0.06x, which is one of the lowest indicators among metallurgical companies in the world.

The cash cost per ton of slab in 2021 compared to 12 months 2021 decreased by 11.8% to $269 per ton, mainly reflecting the impact of ruble devaluation and lower prices for coal concentrate.

Typically, the last quarter of the year is seasonally weak for the company: traditionally, stocks of premium products in warehouses are growing. However, this time, due to warmer weather and pent-up demand, the situation looked different. In the last 3 months of 2021, MMK Group noted growing demand for its products from the automotive industry and the construction sector. The 2500 hot rolling mill reached its planned capacity also had a positive impact on the end of the quarter.

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Dividend policy

The dividend policy of PJSC MMK sets the following priorities:

1. The minimum level paid in the form of dividends at the ratio “Net debt / Ebitda < 1.0x” is equal to 50% of FCF (free cash flow) according to IFRS.
2. The minimum level allocated to dividends at the Net Debt / Ebitda ratio > 1.0x is equal to 30% of FCF under IFRS.

Payments are made on a quarterly basis.

In fact, MMK has been paying much more lately. Thus, in 2017, payments were at the level of 100% of free cash flow, and in 2021 - 2021. this figure increased to 200% of FCF.

Forecasts

In the first quarter of 2021, MMK predicts stable demand in both the domestic and international markets. It should be noted that in the fourth quarter, the share of sales in the domestic market (Russia and the CIS) amounted to 76%, the share of premium products in the sales structure was 44%.

MMK predicts a significant increase in prices for metallurgical raw materials in the first quarter of 2021, but prices for metal products will also increase.

Capital investments should be higher than in the fourth quarter ($229 million).

Stock dynamics

MMK shares as of 11:45 Moscow time rose in price by 0.06% to 53.085 rubles. On December 28, MMK shares reached an absolute maximum of 59.09 rubles. Since then, a correction has been observed, during which last Friday (January 29) the quotes tested the strength of the support represented by the 50-day moving average. From the December 28 high to the January 29 low, the stock fell 13.9%. On Monday, quotes bounced up from the 50-day MA, which had not been broken the day before, hinting at a resumption of the bullish trend observed since October. From the point of view of technical analysis, the closing of any trading day is above 56 rubles.

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The remote registration service is provided for the initial opening of an account with the company.

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Dividends paid by MMK

This table shows all the latest dividend payments of the MMK company separately: 1 line - 1 payment decision. Ticker date T-2 cut-off date Year Dividend period, rub Share price Div. yield MAGN 01/12/2021 01/14/2021 2021 Q3 2,391 57,755 4.1% MAGN 09/21/2020 09/23/2020 2021 Q2 0.607 39,455 1.5% MAGN 06/15/2020 17. 06.2020 2021 Q4 1,507 40.35 3.7 % MAGN 01/13/2020 01/15/2020 2021 Q3 1.65 44.61 3.7% MAGN 10/11/2019 10/15/2019 2019 Q2 0.69 37.61 1.8% MAGN 06/18/2019 06/20/20 19 2021 1 qtr 1,488 47 3.2% MAGN 06/07/2019 06/11/2019 2021 q4 1,398 45.6 3.1% MAGN 12/14/2018 12/18/2018 2021 q3 2,114 46,725 4.5% MAGN 05 .10.2018 09.10.2018 2021 2 quarter 1.589 51.8 3.1% MAGN 06.21.2018 06.25.2018 2021 Q1 0.801 45.295 1.8% MAGN 06.09.2018 06.13.2018 2017 Q4 0.806 48.845 1.7% MAG N 12/15/2017 12/19/2017 2021 3 quarter 1.111 44.1 2.5% MAGN 06.10.2017 10.10.2017 2021 2nd quarter 0.869 44.605 1.9% MAGN 02.06.2017 06.06.2017 2021 4th quarter 1.242 30.9

Severstal CHMF

PJSC Severstal is a vertically integrated mining and metals company with main assets in Russia and a small number of enterprises abroad.

According to the dividend policy, the company pays dividends quarterly, subject to a stable financial position:

At the moment, dividends have been declared for 9 months of 2021 in the amount of 37.34 rubles, the last day of purchase is December 4.

MMK magn

PJSC Magnitogorsk Iron and Steel Works is one of the world's largest steel producers and occupies a leading position among Russian ferrous metallurgy enterprises.

According to its dividend policy, MMK pays dividends quarterly:

Currently, dividends have been declared for the first 9 months of 2020 in the amount of RUB 2,391, the last day of purchase is January 12, 2021.

NLMK nlmk

NLMK Group is a leading international manufacturer of high-quality steel products with a vertically integrated business model.

In accordance with the current Dividend Policy, dividend payments occur annually on a quarterly basis, taking into account the stability of the financial condition:

Based on the results of 9 months of 2021, the meeting of NLMK shareholders approved dividends in the amount of 6.43 rubles, the last day of purchase is December 25.

PhosAgro PHOR

PhosAgro is a Russian vertically integrated company, one of the world's leading producers of phosphorus-containing fertilizers.

Dividends are paid every quarter based on the results of the reporting period:

The Board of Directors aims to pay out between 50% and more than 75% (depending on the company's leverage level) of the company's consolidated free cash flow for the year under IFRS.

Based on the results of 9 months of 2021, the board of directors recommended paying 123 rubles per share. Last day to purchase is December 23rd.

Vanguard AVAN

Russian universal commercial bank that provides all types of banking services.

The bank does not have an approved dividend policy, but actually pays 4 times a year, starting in 2021.

The Board of Directors recommended dividends for 9 months of 2020 in the amount of 24.78 rubles, the last day of purchase is December 18, 2021.

Chemical Industry HIMCP

Produces over 150 types of organic and inorganic chemical products. The headquarters and production facilities are located in Novocheboksarsk. 83.9% belongs to Orgsintez Group CJSC.

Only preferred shares of Khimprom type A are traded on the Moscow Exchange. Ordinary shares are traded on the over-the-counter market.

According to the Charter, owners of preferred shares have the right to receive an annual fixed dividend - 10% of net profit according to RAS is allocated for payments.

History of dividend payments of PJSC Khimprom

In 2018-2019 they paid quarterly, in October 2021 they paid a lump sum dividend for 2021 + dividend from retained earnings + dividend for the first half of the year.

In December 2021, the company may pay a dividend for 9 months, while there have been no announcements. In 2021, they may return to quarterly dividends.

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Securities and other financial instruments mentioned in this review are provided for informational purposes only; The review does not constitute an investment idea, advice, recommendation, or offer to buy or sell securities or other financial instruments.

PJSC Tatneft

TATNEFT is one of the largest Russian vertically integrated oil companies, which dynamically develops oil and gas production, oil refining, petrochemicals, a tire complex, a network of gas stations, electric power, the development and production of equipment for the oil and gas industry and a block of service structures.

MOEX Ticker: TATN (TATNP)

Basis for calculating dividends: 50% of private equity according to IFRS or RAS, depending on which value is greater.

Dividend period: interim payments based on the results of the first quarter, half a year and nine months are possible. At the end of 2021, we paid three times. There were fewer payments in 2021 and 2021 due to the pandemic.

Total number of issuer's securities: 2,178,690,700 pcs. — ordinary shares, 147,508,500 pcs. - preference shares.

Dividend history:

For this issuer, you can count on interim payments only if the oil industry recovers. It does not fit the conditions that I have outlined, but we will keep in mind that more frequent payments are possible.

TCS Group Holding PLC

MOEX Ticker: TCSG

Basis for calculating dividends: 30% PE according to IFRS. But payouts are dependent on a number of factors, including the availability of distributable profits, financial position, future growth initiatives and strategic plans.

Dividend Period: Distribution of excess capital occurs on a quarterly basis.

Total number of issuer's securities: 119,291,268 pieces.

Dividend history:

Tinkoff's dividend yield is not high, as it is more of a "growth stock."

All company dividends for the last 10 years

How to buy shares and receive dividends

MMK securities are traded on the Moscow Exchange. It is more logical and easier for a private investor to buy them by opening an account with a licensed Russian broker.

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Warning about Forex and BO

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There are no real transactions to purchase ownership rights to a particular asset, and clients on long series of bets are doomed to failure.

Stock return

As a base value, I will take the cost of ordinary MMK securities equal to 42 rubles.

When purchasing at the current price, an investor can expect the following quarterly returns:

0.68 / 42 = 1.62% excluding taxes or 1.41% including personal income tax withholding.

If you look at the LTM indicators (last 12 months), the annual dividend yield for MMK shareholders is:

(2.11 + 1.4 + 1.49 + 0.69) / 42 rub. = 13.5% excluding taxes or 11.79% including personal income tax withholding.

Moscow Exchange

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