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Many thanks for the detailed reply John.
1)
1)
See p7 of https://www.polymetalinternational.com/files/en/2023_05_10_Analyst_and_Investor_Briefing_transcript.pdf
"In terms of taxation, specifically the company's taxation and not so much about the
shareholders taxation - the company after the re-domiciliation will be subject to the
Kazakh tax regime, although AIFC offers significant tax benefits versus the general tax
code for Kazakhstan registered companies and specifically, as Vitaly has mentioned, the
dividends will be exempt from the taxation in Kazakhstan."
2)
See https://aix.kz/equity-income-tax/ , this echos the above and also refers POLY specifically.
...what could go wrong.
https://www.thetimes.co.uk/article/the-struggle-to-save-the-minds-of-traumatised-troops-before-sending-them-back-out-2j73g2z5w
Poly SP $4.94 and this is with all the uncertainties around it.
A sale and a special dividend takes polymetal to $10 minimum in my opinion.
We will have a company with
1. A credible and competent management especially after navigating all the sanctions and counter sanctions.
2. A debt free company.
3. A cash rich company.
4. A dividend paying company
5. A gold producer.
That has to be worth $10 minimum. Think of all the indexes and trackers that will want back in.
@E.Penfold.......I’d say minimum divi of 60 cents per share in the short term, rising with expansion of capacity in both Kaz and West Asia countries thereafter.
IMO it is reasonable to assume a buoyant market for gold in short to medium term given falling interest rates and global geo-politics. The market could even explode if US/EU decide to confiscate Russian reserves held in the West to pay Ukraine, as this would accelerate move away from hard currencies and into gold.
I also think there would be a special divi should POLY secure sale of its Russian business which imo is worth at least $8bn in normal times; equating to approximately $15 per share. But times are not normal so we’ll have to see how that pans out.
One thing I’m absolutely convinced on is the massive current under valuation of the business; sp is trading at less than 25% its true value as compared to its piers operating in the normal world.
Note this is my opinion only...please DYOR
Fingers xd...........
Morning fellow investors. Does any one know if there is any With Holding Tax before we get Dividends.
Thank you
Thanks for this analysis John.
Have you attempted to estimate the future dividend based on Kazakhstan only ?
Https://www.thedailybeast.com/the-real-reason-thousands-are-fleeing-conscription-in-ukraine
“I don’t want to die. I hear that a lot of soldiers who come back from the frontline have psychological issues. They are different men,” says the man who The Daily Beast will call Sergei. “Some will probably have drinking problems and a lot of other issues and no future. I want to have a future.”
Many thanks again, John - I hold with renewed confidence and interesting to see if Mr Nesis mentions penalties or negotiations on the 31st.
I can never respect hypocrites like Jotom and alter ego. They come on here and bash Putin/Russia but are happy to make "blood profits".
Absolute hypocrites trying to fake morals.
I lose patience sometimes with some of the questions people ask.
Nesis said the payments of dividends will be subject to a successful sale of the Russian business. He will not want to annoy people in Moscow by paying dividends from a Russian asset to people from unfriendly countries.
It is blindingly obvious that everything polymetal is tied to the sale of the Russian assets
Shar price rise
Dividends and
Return to LSE
Are all dependent on the sale of PolyR.
@Moorscloud...POLY's objective on divis is stated in its annual reports which reads as follows:
"Our Dividend Policy is for a minimum 50% pay-out of underlying net earnings, paid each half year (subject to absolute Net debt/ previous 12-months’ Adjusted EBITDA ceiling of 2.5x).
Assuming POLY have managed to unwind inventory to normal levels at the year end, I’m expecting EBITDA of around $1.5bn and net profit to be around $1bn for 2023. Given normal times, this should trigger divis of around $500m at least on 2023 earnings, equating to approx $1 per share. So I’m in agreement POLY will yield good divis going forward once situation normalises. I am also holding shares for good divi yield, which have already more than doubled in sp since I bought them in 2022.
Further, forecasts for gold in short/medium terms are very good given falling interest rates over coming years, geo-politics and so on. As far as Russian operation is concerned, there is the added attraction immediately on capitalising on a favourable USD/Rub exchange rates and so any party interested in buying would want to get its hands on the company asap.
I think POLY is seriously looking to offload Russian assets which could be toxic for many years to come given its alliance with China and the geopolitics that entails. Also, the costs of producing gold in Russia is much higher than in Kaz or any other West Asian countries where POLY wants to expand. Currently Russia is highly profitable largely due to favourable exchange rates which will not be the case in the long term. At the same time, POLY have spent many years developing Russian assets which are high quality and so would not want to give it away either, and treat it as a cash cow in coming years in absence of a sale.
I think Nesis said back in October did say that POLY have been approached already by a number of buyers. I personally don’t think there is any shortage of buyers; be it Chinese or Russian. I think any sale agreement would be subject to a favourable settlement with Russian authorities which would mean negotiations. Companies pulling out so far have been from sanctioned countries and so POLY would present a unique situation requiring unique one off solution. The fact that POLY withdrew from UK to sell Russian business and have stated it would return to UK once having done so does not bode well IMO. I think POLY were pressured to say this at the time to calm nerves of shareholders and steady the price.
Russian authorities will interpret this not in a favourable manner and hence will impose a penalty which may well be unacceptable to POLY. In the coming update, I don’t think POLY will elaborate on this any more than to say negotiations are ongoing.
IMO a stumbling block will be the penalty imposed by Russian authorities and not finding of a buyer.
Note this is my opinion only….please DYOR
Fingers xd……..
Thank you for the considered, informative response, John. As you've doubtless realised, I personally am looking at Poly as a long-term divi/income provider and even as this is delayed, the "higher group profits and falling debt" will presumably be reflected in eventual dividends as well as the sp. Do you feel then Poly's concern about the penalties is holding them back from attracting buyers or could it be that a sale is actually actively being sought at this time?
Further, POLY would hope shareholders stay on board with the lure of rising sp over and above the market. This is nothing new as companies like AAPL, MSFT, AMZN etc didnt pay divis for years but delivered on sp growth.
Seems fair enough for a modern day hitler inflicing death and destruction on another country.
@Moorscloud.....In the POLY Q3 report put out on 31.10.2023, Mr Nesis said the following:
"The dividend decisions for the company will depend on the progress with the sale of the
Russian business and until this sale is finalized and executed, I don't think it will be appropriate for the company to pay dividends. I remain hopeful that dividend distribution will be on the Board's agenda when we approve the report for 2023 and as such, dividend payment would be possible based on the results of the full year 2023. This represents a slippage compared with our previous expectations but again, both operational difficulties in terms of unwinding the inventory, and complications in terms of completing the sale of the Russian business are pushing back the dividend distribution into the future."
To me it is clear divis are 100% dependent on sale of Russian business as long as sanctions remain in place. Russia would not allow capital outflows to pay shareholders in the West, and company could not pay Russian shareholders from Russia profits and rest from Kaz as they have already declared Russian entity operates totally independent from rest of POLY and this has helped keep sanctions both on POLY and its senior management at bay.
POLY is hoping sale can be concluded with minimum penalty, but somehow I have my doubts. I also think POLY will remain put in Russia if it cannot get a 'fair' price; and why should they give the business away? POLY is currently not sanctioned and company can sell all the gold it produces in Russia at market prices, so no harm continuing with extremely profitable trading and let the cash pile up. Anyway, in the current favourable trading environment it would take POLY Russia about 20 months of trading to repay approx $2bn in loans it has in Russia so cash can be applied productively and shareholder value increased in the current environment of high interest rate.
Absence of divis will not suit some shareholders, but higher group profits and falling debt should have positive impact on the sp regardless. We will know more in update to be provided on 31st January, which I expect to very positive on 'trading' and cash flow, and see sp moving north of $5 within days of an update.
Fingers xd........
John - you said recently "Penalty will have to be paid, and me thinks it may be a too heavy a price to pay, which will leave POLY with no option but to stay put till the conflict ends." Tragically for the people and country of Ukraine, it is hard to see this resolving at all yet alone soon. Hoping this doesn't sound too trite and selfish but is there any way the dividends could be paid without the sale or end of the conflict and if not, do you think shareholders will start to drift away from Poly without them - and would Poly care if so..?
Reality is far more concerning.......
"Throughout the past few months, Vladimir Putin has offered up all manner of outlandish excuses for his invasion of Ukraine. At various different times he has blamed the war on everything from NATO expansion to imaginary Nazis, while also making completely unsubstantiated claims about Western plots to invade Russia and Ukrainian schemes to acquire nuclear weapons.
The reality, it now transpires, is considerably less elaborate and infinitely more chilling. Putin has launched the largest European conflict since WWII for the simple reason that he wants to conquer Ukraine. Inspired by the czars of old, Putin aims to crush his neighbor and incorporate it into a new Russian Empire".
https://www.atlanticcouncil.org/blogs/ukrainealert/putin-admits-ukraine-invasion-is-an-imperial-war-to-return-russian-land/
Not funny at all.
Z lays out his terms of peace in Davos:
"To resume negotiations, Russia must completely withdraw from the territory of Ukraine, change its political elite, acknowledge war crimes and extradite the organizers of the war to the tribunal".
Despite what's gone on in the past 2 years, he still hasn't lost his sense of humour...has he?
It seems to me that the market has less hope of a quick deal for a reasonable price being done at the moment. Maybe there needs to be some thinking on the ability to pay a dividend to both ru and kaz shareholders in the meantime to get the share price moving. No good news (of any sort) means a gentle float down in share price in my view.
GLASH.
Just spoke to FF. It appears I transferred to FF Kazakhstan and I'm not affected which is just for FF Cyprus clients. If you're not sure call FF in the UK on 0203 746 7767. I hope I haven't alarmed anyone unnecessarily.
I've had a response from Halyk they require hard copies of passport etc sent by post. Also one of two forms is not in English I wonder if there is an alternative
Poly are suggesting Halyk Finance. Contact: a.tazhekova@halykfinance.kz
Freedom Finance Global PLC
https://ffin.global/en
trying asking on the telegram group. ****/polylondon