Profit distribution and dividend policy

The dividend policy of JSC Lenenergo is directed on increase of the Company’s investment appeal and increase in its market capitalization. The policy is based on the balance of interests of the company and its shareholders, on respect and strict observance of the rights of shareholders provided by the current legislation of the Russian Federation, the charter and internal documents of the Company.

The dividend policy of the Company is defined by the Regulations on dividend policy approved by decision of the Board of Directors of the Company on 31.08.2010 (Minutes # 4).

The Regulations define overall principles of JSC Lenenergo dividend policy, terms of payment and the amount of dividend payments, sources of funds directed on dividends payment, a procedure for decision-making on dividends payment, a procedure for drawing up of the list of persons having the right to receive dividends, an order, terms and a form of dividends payment, disclosure of information on dividend policy, responsibility of the Company for nonpayment of dividends. The Regulations on dividend policy of JSC Lenenergo and all alterations to it are available on the Company’s website on the Internet.

Basic principles of JSC Lenenergo dividend policy:

  • calculation of dividends is based on the use of profit without influence of reassessment of financial investments;
  • the need to maintain a required level of the financial and technical condition of the Company (implementation of the investment program), providing prospects of the Company’s development;
  • compliance with the practice of accrual and payment of dividends approved by the Company to the legislation of the Russian Federation and to the best standards of corporate behavior;
  • optimum combination of interests of the Company and its shareholders;
  • the need to increase the Company’s investment appeal and its capitalization;
  • ensuring transparency (clearness) of the mechanism of determination of the size of dividends and their payment;
  • dividends on ordinary shares are paid only in case of full payment of dividends on preferred shares according to the Company Charter (in case of placement of the Company’s preferred shares).

The recommended sum of dividend payments is defined by the Board of Directors on the basis of financial performance of the Company, thus the Board of Directors aspires to provide positive dynamics of the size of dividend payments to shareholders.

Profit distribution in 1Information on profit distribution according to decisions of the Annual general shareholder meetings (AGSM) is provided in tables:
AGSM 2011 (for 2010) – AGSM Minutes
# 1/2011 of 21.06.2011;
AGSM 2012 (for 2011) – AGSM Minutes
# 2/2012 of 20.06.2012;
AGSM 2013 (for 2012) – AGSM Minutes
# 1/2013 of 21.06.2013.
2011–2013

Type of income

for 2010
(AGSM 2011)

for 2011
(AGSM 2012)

for 2012
(AGSM 2013)

Growth 2013/2012, %

Retained profit, RUB thousand

3,805,591

1,417,420

1,234,328

-12.9

Reserve fund, RUB thousand

0

0

31,356

Profit on development, RUB thousand

3,425,032

1,275,678

894,390

-29.9

Dividends, RUB thousand

380,559

141,742

308,583

117.7

Other purposes, RUB thousand

0

0

0

Dividend history of the Company

Type of income

Dividends for 2010 (AGSM 2011)

Dividends for 2011 (AGSM 2012)

Dividends for 2012 (AGSM 2013)

Growth 2013/2012, %

Per one ordinary share, RUB

0.00

0.00

0.16

Per one preferred share, RUB

4.08

1.52

1.32

-12.9

Information on the sums of accrued dividends from 2010 to 2012

Type of income

Dividends for 2010 (AGSM 2011)

Dividends for 2011 (AGSM 2012)

Dividends for 2012 (AGSM 2013)

Growth 2013/2012, %

Ordinary shares, RUB thousand

0.0

0.0

185,150.0

Preferred shares, RUB thousand

380,559.1

141,742.0

123,432.8

-12.9

Information on the sums of paid dividends from 2010 to 2012

Type of income

Dividends for 2010 (AGSM 2011)

Dividends for 2011 (AGSM 2012)

Dividends for 2012 (AGSM 2013)

Growth 2013/2012, %

Ordinary shares, RUB thousand

0.0

0.00

185,150.1

Preferred shares, RUB thousand

380,559.1

141,742.0

123,432.8

-12.9

Indicators of dividend profitability of JSC Lenenergo shares

2010

2011

2012

2013

Calculated on the formula: the sum of accrued dividends for the reporting year / net profit for the reporting year calculated on RAS.Payout ratio, %

Ordinary shares

0.00

0.00

15.00

15.00

Preferred shares

10.00

10.00

10.00

10.00

Calculated on the formula: dividend per one share for the reporting year / average cost of one share for the reporting year end.Dividend Yield, %

Ordinary shares

0.00

0.00

2.47

Preferred shares

11.39

6.99

7.51

The Company annually pays dividends on preferred shares. For the first time since 2005 dividends on ordinary shares were paid in 2013. The general size of dividends for 2012 totaled 25% of net profit of the Company calculated according to RAS. Payout ratio for 2013 is given on the basis of recommendations of the Board of Directors to the Annual general shareholder meeting. The decision on payment of dividends for 2013 will be approved at the Annual General Shareholder Meeting in June, 2014. For the last years the Company shows high dividend profitability – one of the best in the sector.

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