Dividends

Dividend policy

MMC Norilsk Nickel’s Dividend Policy aims to balance the interests of the Company and its shareholders, enhance the Company's investment case and market capitalisation, and ensure respect of shareholder rights.

The Company has put in place the Regulations on the Dividend Policy to ensure transparency on how dividends are calculated and paid out.

Key principles of Nornickel’s dividend policy:

  • Legality: compliance with the Russian law, the Company's Charter and by-laws;
  • Transparency: transparency on how dividends are calculated and paid out;
  • Balance: dividend payouts to shareholders along with long-term business development and capitalisation growth for the Company;
  • When calculating dividends, MMC Norilsk Nickel accounts for the cyclical nature of the metals market and for the need to maintain a high level of creditworthiness. As a result, the amount of dividends may change depending on the Company’s operating profit and leverage.

Under the Company’s dividend policy, in determining the recommended dividend amount, the Board of Directors seeks to make sure that annual dividends on the Company’s shares make up at least 30% of the Group's consolidated EBITDA.

The decision to pay dividends is made by the General Meeting of Shareholders based on recommendations of the Board of Directors. The General Meeting of Shareholders also takes into account the Board’s recommendations to determine the dividend amount and record date, which shall be set not earlier than 10 days before and not later than 20 days after the General Meeting of Shareholders.

Dividends to a nominee shareholder listed on the shareholder register shall be paid within 10 business days, while dividends to other persons listed on the shareholder register shall be paid within 25 business days after the record date.

Dividend report

Dividends are paid to individuals/entities whose rights to shares are recorded in the shareholder register by Independent Registrar Company, MMC Norilsk Nickel’s registrar

Individuals/entities whose rights to shares are recorded by a nominee shareholder are paid dividends via their nominee shareholder.

In accordance with Clause 9 of Article 42 of Federal Law No. 208-FZ On Joint-Stock Companies dated 26 December 1995, any person who has not received the declared dividends due to the fact that their accurate address or banking details were not available to the company or the registrar as required, or due to any other delays on the part of the creditor, may request payment of such dividends (unpaid dividends) during the period of three years from the date of the resolution to pay the same.

On 24 May 2018 the Company's Board of Directors recommended that the General Meeting of Shareholders approve final dividends for FY 2017 in the amount of RUB 607.98  per share (~ USD 9.87 at the RUB/USD exchange rate the Russian Central Bank as of May 24, 2018) per share totalling RUB 96.2  mln (~ USD 1,562 at the RUB/USD exchange rate the Russian Central Bank as of May 24, 2018)

Declared dividends per share Dividend paid during the above periods, excluding treasury shares. // USD
Dividend yield Dividend yield for the periods calculated based on the amount of dividends for the calendar year recommended by the Board of Directors and on the average ADR price by Bloomberg.
Dividends paid Dividend paid during the above periods, excluding treasury shares.
Period RUB mln USD mln
2017 176,246 2,971
2016 86,712 1,232
2015 154,227 2,859
2014 159,914 3,281

Committed to developing Tier-1 assets, Nornickel has been able to provide a consistently high dividend yield to its shareholders over the last five years. We expect the trend to continue.

Dividend history For dividend history covering earlier periods, please see our website.
Period Declared dividends Calculated at the Bank of Russia's exchange rate as at the date of the Board of Directors’ meeting. Dividend per share/ADR
RUB mln USD mln RUB USD
Total for 2017 131,689 2,162 832 13.66
FY2017 On 24 May 2018, the Company's Board of Directors recommended that the General Meeting of Shareholders approve final dividends for 2017. 96,210 1,562 608 9.87
6M 2017 35,479 600 224 3.79
Total for 2016 140,894 2,339 890 14.78
FY2016 70,593 1,239 446 7.83
9M 2016 70,301 1,100 444 6.95
Total for 2015 135,642 2,148 857 13.57
FY2015 36,419 548 230 3.46
9M 2015 50,947 800 322 5.06
6M 2015 48,276 800 305 5.06
Total for 2014 226,668 4,798 1,432 30.32
FY2014 106,031 2,018 670 12.75
9M 2014 120,637 2,780 762 17.57

Taxation

Income from securities is taxable pursuant to the applicable tax laws of the Russian FederationChapter 23 (Personal Income Tax) and Chapter 25 (Corporate Income Tax) of the Russian Tax Code..

Reduced tax rates or exemptions may apply to individuals and foreign entities who are not tax residents of Russia pursuant to international double tax treaties.

Starting from 1 January 2017, in order to apply for tax benefits under international double tax treaties, foreign organisations must confirm their permanent residence in a state which has a double tax treaty signed with Russia, and also provide the income paying tax agent with a document confirming the right of the organisation to receive such income (Clause 1, Article 312 of the Russian Tax Code).

Should the organisation fail to provide such confirmation by the date of the payout, the Russian tax agent shall withhold the tax at the standard rates stipulated by Clauses 2 and 3, Article 284 of the Russian Tax Code.

Dividend tax formula The formula is not applicable to dividends paid to foreign entities and/or individuals who are not tax residents of Russia. AT=P×TR×(D1 –D2)

AT — amount of tax to be withheld from the income of the recipient of dividends;

P — proportion of the dividend amount payable to one recipient to the total dividend amount to be distributed;

TR — tax rate for Russian entities (0% or 13%);

D1 — dividend amount to be distributed among all recipients;

D2 — dividend amountExcluding the dividend amount eligible for a zero tax rate pursuant to Subclause 1, Clause 3, Article 284 of the Russian Tax Code., received by the entity paying dividends, provided that previously these amounts were not included in the taxable income.

Tax treatment of income from securities
Item Income from securities transactions Interest income on securities Dividend income on securities
Individuals
Residents 13 13 13
Non-residents 30 If shares or other securities are sold in Russia. 30 15
Legal entities
Russian companies 20 Or 0%, if shares (interests) of Russian entities acquired on or after 1 January 2011 are sold, provided that as at the date of their sale the shares (interests) have been owned for over five years and subject to one of the conditions stipulated by Clause 2, Article 284.2 of the Russian Tax Code. 20 13 Or 0%, if as at the date of the dividend payout resolution a Russian entity has been owning an interest of 50% (and more) in the authorised capital of the entity paying dividends, for 365 days (and more).
Non-resident companies 20 20 15