Last checked at 27 Apr 2017 14:11
27 April 2017
Tatneft Board of Directors recommended to increase the dividend payout for 2016
A regular meeting of the Board of Directors of PJSC Tatneft was held in Kazan on 27 April 2017 chaired by the President of the Republic of Tatarstan R.N. Minnikhanov.
One of the main items on the agenda was dedicated to the discussion of the results of operations and financial activities of the Company in 2016 and the approval of recommendation on the amount of dividends for 2016.
Last year was the first in implementation of the Strategy of Development of Tatneft whose main target is to double the value of the Company in US Dollar terms by 2025. The Strategy 2025 has defined goals and tasks for all business streams of Tatneft Group, and allows to forecast operational, investment and financing activities more effectively. Based on the Strategy 2025 implementation plans - investments required to support and grow the production, human capital development, including the fulfilment of all social commitments, efficiency improvement initiatives, procurement of sustainable development, as well as taking into account substantially decreased leverage and accumulation of cash in the prior periods, the Board of Directors resolved to recommend to the Annual General Meeting of Shareholders of PJSC Tatneft to be held on 23 June 2017 to approve the dividends on ordinary and preferred shares of the Company in the amount of 2281% of their par value, which in aggregate represents approximately 50% of PJSC Tatneft's IFRS profit for 2016 or 50.62% of net income under the Russian Accounting Standards (RAS). In the course of many years the Company has been paying dividends representing approximately 30% of its annual RAS net income, providing a steady and relatively high dividend yield to its shareholders. The dividend payout increase stimulates the effective implementation of the Strategy 2025, while increasing the responsibility for achievement of the goals set by it. The management will continue working on the Company's financial strategy and related modifications to its dividend policy, which will be presented to the Board of Directors for approval.
Overall in 2016 the companies of Tatneft Group produced 28.686 million tonnes of crude oil (which is 5.3% higher than the level of 2015), including 28.333 million tonnes by PJSC Tatneft (which is 5.2% higher than the 2015 level). 843 thousand tonnes of highly viscous oil (HVO) were produced at the Ashal'chinskoye oilfield, contributing to 1781 thousand tonnes of total HVO production as of 1 January 2017 from the commencement of thermal methods assisted recovery operations. 941 million cubic meters of associated petroleum gas were collected. 508 and 482 new production and injection wells, respectively, were put into operation. Gross revenues (excluding VAT and export duty) of PJSC Tatneft under RAS were 486 billion Rubles, net income - 105 billion Rubles. The total amount of taxes paid to the budgets of all levels was 237.9 billion Rubles. The investment program of Tatneft Group was financed in the amount of 97.2 billion Rubles.
The Board of Directors discussed the process of increasing the wells grid density in some pilot prospects of the Company, and the potential for increasing crude oil production by involving larger reserves from the Carboniferous formations.
Also the Board considered the results of the Company's fulfilment of the first quarter budget and approved the budget for May 2017, was presented with the information about the Annual General Shareholders Meeting and considered some other items relating to the Company's activities.
This press release contains inside information.
Forward-looking statements: These materials contain statements about future events and expectations that are forward-looking in nature. Any statement in these materials that is not a statement of historical fact is a forward-looking statement that involves known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements expressed or implied by such forward-looking statements to differ. PJSC Tatneft assumes no obligations to update the forward-looking statements contained herein to reflect actual results, changes in assumptions or changes in factors affecting these statements.