The management of Russian mining giant Nornickel has proposed slashing its annual dividend for 2022 to $1.5 billion from the $6.3 billion paid out for 2021, the economic news outlet RBC reported on Saturday, citing three sources close to the board of directors.
Nornickel’s two main shareholders are Vladimir Potanin’s Interros holding company with 37% and Russian aluminum producer Rusal with 26.39%.
RBC cited the three sources as saying the proposal had been made at a board meeting on Dec. 15, and that Nornickel’s management had justified the need for a hefty dividend cut due to a major investment program.
At that meeting, the board approved a 10% increase in capital expenditure to $4.7 billion for 2023.
RBC quoted Nornickel director Elena Bezdenezhnykh as saying a final decision on the dividend would be made “after the closing of the financial statements for a difficult 2022, guided by the company’s current dividend policy”.
Two sources told RBC the decision would be made in March-April.
Nornickel declined to comment on the RBC report.
The dividend policy Nornickel adopted in 2016 provides for shareholders to receive a dividend equivalent to at least 30% of earnings before interest, tax, depreciation and amortization (EBITDA).
(By Kevin Liffey; Editing by Helen Popper)