Sanctions-Hit Alrosa to Axe Shareholders' Dividend
June 08, 22
(IDEX Online) - Sanctions-hit Alrosa is expected to make no dividend payment to shareholders for the second half of last year, citing the need to "maintain sustainability of its operations".
The miner, a third owned by the Russian government, today announced that its supervisory board was recommending the move.
In 1H 2021, Alrosa paid out just over $1bn (RUB64.7bn) to shareholders, more than 70% of the company's net profit for the year.
The US and the EU imposed a ban on rough diamond imports from Russia after it invaded Ukraine.
The US subsequently added Alrosa to its Specially Designated Nationals (SDN) list, excluding the company it from its banking system and barring it from trade with US citizens.
Alrosa made no direct mention of sanctions in a statement. It said: "Considering current situation, and given interim dividend payments in 2021 which accounted for 70% of 2021 net income (exceeding required threshold of 50%), the board decided not to recommend H2 dividends, as the company deems paramount importance to maintain sustainability of its operations and cater its social obligations as the company remains the key employer in the region and lives and well-being of its employees depend on the company's ability to run its mining business safely and in sustainable fashion, without compromising any sustainability aspect of its operations."
Shareholders are due to vote on the supervisory board's recommendation at the AGM on 30 June.
Pic shows Mirny, where Alrosa is based