Date: 30 June 2022 Author: Grzegorz Kuczyński

Russia’s Gazprom Cancels Dividend Payment

Quite surprisingly, Russian gas giant Gazprom has decided not to pay dividends on last year’s results, which were record high.

Gazprom’s shareholders reversed a board recommendation to pay out dividends. “The shareholders decided that in the current situation it is not advisable to pay dividends based on the 2021 results,” Deputy CEO Famil Sadygov said. He added that Gazprom would rather focus on Russian regional gasification, preparation for the heating season and paying increased taxes. As Russia continues its war in Ukraine, Gazprom will be more subordinated to state policy. In late May, Gazprom’s board of directors recommended paying a dividend of 52.53 roubles per share in what would have been its biggest payout. The company planned to pay 1,243.57 billion roubles worth of dividends. This is a record-high result for both Gazprom and all Russian state-run businesses. In 2018, Gazprom revised its earlier dividend proposal to a record 16.61 roubles per share. In 2020, the company’s management board proposed paying 12.55 roubles per share. Dividends for 2021 may therefore soar four-fold as Gazprom notched its best-ever financial result. Last year, the company’s net profit stood at 2.093 trillion roubles. As a result, record dividends were expected. Last December, Gazprom’s Deputy CEO Famil Sadygov told journalists free cash flow is seen above 1 trillion roubles for 2021. Gazprom is believed to report record earnings in 2022 thanks to soaring commodity prices. It is said it could be $100 billion, doubling the company’s revenues last year. The decision to halt its dividend payment comes probably from the federal government as its main shareholder, and not the company itself. Perhaps Russia is bracing for an acute energy crisis and Gazprom would be desperate for money so as not to burden the federal budget.

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