Putin: Gazprom has 'no real cash flow'
The final decision on the exact amount of Gazprom's profit share that will be spent on dividends has not yet been made, as stated by Russian President Vladimir Putin on May 15, responding to a question at a press conference in Beijing. The President noted that Gazprom "has no real cash flow."
The Head of State noted that he had discussed this issue with Prime Minister Dmitry Medvedev before his departure for China and that the decision would take into account the fact that a significant part of Gazprom's profits is "on paper."
"According to IFRS (International Financial Reporting Standards), a company like Gazprom has large profits. But it is paper, it's only on paper. There is no real cash flow, therefore, when the government decides on this issue, it will certainly take into account the realities, not the paper component of the company's revenues," Putin said.
Against the backdrop of the President's statement, the value of Gazprom's shares on the Moscow stock market has significantly decreased. At its lowest point, the value of securities fell to 129.28 rubles ($2.29 at 1 USD = 56.5 RUB current rate), which is 2.4% lower than at the close of the previous day’s trading.
On April 27th, Gazprom reported that the company's net profit attributable to its shareholders amounted to 951.637 billion rubles in 2016 ($14.16 billion at 1 USD = 67.19 RUB if we take the average annual exchange rate for 2016). This figure is nearly 164.5 billion rubles ($2.45 billion) or 21% higher than in the previous year.
On the same day, First Deputy Prime Minister Igor Shuvalov said that in general, Putin approved the payment of dividends amounting to 50% of the net profit of the majority of state-owned companies that the Prime Minister, Dmitry Medvedev, had offered.
Earlier, Shuvalov said that the final decision had not been made by then, and that an exception could be made for some companies.
"The suggestion is to take a maximum of 50% from those who are able to pay. And in cases where it cannot be done, there should be significant reasons, and there must be a complex decision-making process," Shuvalov emphasized.
The Minister of Finance, Anton Siluanov, proposed to use the level of income that state-owned companies bring to the state as a key indicator of the effectiveness of their management.