07/06/2022
Russian President Vladimir Putin applauds.
Russian President Vladimir Putin.

  • Russian oil giant Rosneft has recommended a record dividend for 2021.
  • Rosneft posted record profits last year thanks to higher oil prices as demand rebounded after the easing of pandemic restrictions.
  • Since Rosneft is a state-owned company, the Russian state will be the biggest beneficiary of these payments.

Russian oil giant Rosneft plans to pay record dividends to shareholders amid tightening sanctions over the war in Ukraine.

Rosneft’s board is recommending 23.63 rubles ($0.38) per share for the second half of 2021, according to a statement Monday on the London Stock Exchange, where the company has a secondary listing. This brings the full-year dividend to a record high of 41.66 rubles ($0.68).

Rosneft saw record profits in 2021 thanks to higher oil prices as demand rebounded as pandemic restrictions eased. As a company policy, Rosneft pays 50% of its net income to shareholders as dividend. Rosneft announced that shareholders will vote on the dividend’s recommendation on June 30.

Since Rosneft is a state-owned company, the Russian state will be the biggest beneficiary of these payments. A Russian state-owned company owns more than 40% of Rosneft shares.

In turn, foreign investors may struggle to get paid. According to Bloomberg’s translation of his order in March, Russian President Vladimir Putin ordered money owed to investors or lenders from “unfriendly countries” to be transferred to private ruble bank accounts. Recipients can only exchange it for another currency if they get special permission from Bloomberg.

Rosneft’s dividend recommendation came on the same day the European Union agreed to cut 90% of Russia’s oil imports by the end of 2022. The trade bloc has tightened sanctions against Russia over the country’s invasion of Ukraine.

As Russia is an energy giant, the war in Ukraine has affected international markets as investors fear supplies from the country will be disrupted by trade restrictions or infrastructure damage. This has sent oil prices up about 60% so far this year.

Russia’s state-owned gas giant Gazprom also proposed its highest-ever dividend last Thursday on the back of record earnings.

Read the original article on Business Insider

Source site – 19