The shares gained as much as 9.4 percent, the most since Jan. 25, 2012. EON Russia recommended paying 29 kopeks a share for 2012, all of net income prepared to international standards, and 40 percent to 60 percent of earnings in coming years.
“This is on par with the German controlling shareholder’s policy and is the most generous profit distribution scheme we have seen among Russian utilities so far,” Vladimir Sklyar, an analyst at Renaissance Capital, wrote today in a note.
The 2012 dividend means an 11.3 percent yield on the stock at yesterday’s close, Sklyar said. The record day is today and shareholders are due to vote on the plan on June 27.
The stock rose 7.1 percent to 2.75 rubles by 1:20 p.m. in Moscow. Volume on the Micex was 2.6 times the 30-day average and 10-day volatility rose to 53.73, the highest since June 2012.
The 2012 payout will be 18.3 billion rubles ($583 million), EON Russia (EONR) General Director Maxim Shirokov told reporters. The future dividend policy is a guide, with final percentages depending on financial results at the time, the company said.
The completion of most obligations to invest in plants and a “strong” cash balance allows for “significant” dividends for the first time, EON Russia said in a presentation. Its installed capacity rose 20 percent from 2007 and its investment program will be completed by 2015, on time and within budget.
EON Russia’s “$1 billion cash pile and ongoing operating cash flow is more than sufficient to complete the last investment project” at Berezovskaya power plant, Sklyar said.
“We are impressed that EON Russia has not followed, and might have even broken, the Russian utilities sector imperative of invest now, forget about the dividends,” Mikhail Rasstrigin and Alexander Seleznev, VTB Capital analysts, said in a note.
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