GV Gold announces new dividend Policy
GV Gold Board of Directors has approved a new dividend policy in line with industry best practices that aims to maintain a consistently high level of dividend payments.
The new formula for calculating dividends, which was based on an analysis of best practices by Russian and foreign companies, is clear and transparent. EBITDA based on the Company’s IFRS financial statements will be used to calculate dividends, as this indicator best reflects the Company’s operating performance and quality of earnings, as opposed to net profit. The target dividend payout ratio is 30% of EBITDA, provided that LTM net debt/EBITDA is below 2.5x.
If the LTM net debt/EBITDA ratio is above 2.5x and below 4.0x, the Board of Directors may decide to pay up to 20% of EBITDA, if the Company’s cash position, cash flow forecast, market trends and debt covenants allow for it. If the LTM net debt/EBITDA ratio is higher than 4.0x, dividends will not be paid.
The Board of Directors may also consider special dividends after taking into account the Company’s liquidity position, capital expenditure plans and ratio of cash to borrowed funds, and if debt covenants allow.
This flexible scheme for determining dividends helps to ensure the financial stability of the Company while also facilitating successful execution of its business strategy.
The new dividend policy will come into effect immediately following its approval. Thus, dividends for 2017 will be calculated and paid according to the new conditions, after the deduction of previously-accrued dividends for H1 2017.
Previously, the Company paid dividends of no less than 25% of its net profit for the year, calculated in accordance with Russian Accounting Standards. Based on its 2016 results, GV Gold’s total payments to shareholders amount to RUB 2.179 billion.
GV Gold is one of largest and fastest growing Russian gold mining companies. It develops open pit deposits and washes gold at the country’s largest alluvial deposit. In 2017, the Company produced 225 koz of gold, becoming the 7th largest gold miner in Russia. GV Gold boasts an extensive resource base, with JORC reserves and resources estimated at 4.4 moz and 7.0 moz, respectively.
Its key operating assets are located in the Irkutsk Region and the Republic of Sakha (Yakutia). The Company operates six mines with a total capacity of 8 mtpa of ore and holds 20 mining and exploration licences.
The Company adheres to high corporate governance standards and has a transparent ownership structure, with BlackRock among its shareholders (17.99%).
For further information, please visit http://gvgold.ru