At least two dozen Russian companies have suggested not paying dividends from their 2024 results. High interest rates, reduced revenue, and sanctions are taking their toll, according to Vedomosti on Monday.
State statistics from Rosstat show a decline in earnings. Total earnings of Russian companies fell to 30.4 trillion rubles ($381.1 billion) in 2024. That’s a decrease of 6.9% compared to 2023.
When adjusting for inflation at 9.4%, real earnings dropped around 15%. Yet, profitable firms saw an aggregate result of 37.6 trillion rubles ($471.5 billion), decreasing merely by 0.8%. Conversely, company losses shot up by 37.7%, hitting 7.2 trillion rubles ($90.2 billion).
Leading the list of sectors impacted are mining and energy. Companies like Gazprom, Norilsk Nickel, NLMK, and Severstal have halted dividend payments for late 2024 and early 2025. En+ Group, Rusal, and Rosseti follow suit.
Gazprom is grappling with loss of export revenue. Furthermore, NLMK has reported losses, signalling a hard year ahead. Retail, real estate, agriculture, logistics, machinery, and healthcare also face difficulties.
### Companies Holding Back Dividends
– Magnit
– Lenta
– M.Video
– United Wagon Company
– CIAN
– PIK
– Samolyot
– Promomed
– Rusagro
– Artgen
– Sovcomflot
– Globaltruck
– Nizhnekamskshina
– Yakovlev Aircraft Corporation
Market gurus are expecting more firms to join the list. Companies like RusHydro, Alrosa, Aeroflot, and Vse Instrumenty are under watch for potential dividend cuts.
### Financial Pressures and Strategic Choices
Vladimir Chernov from Freedom Finance Global noted that declining export revenues and sanctions are squeezing incomes. This affects firms such as Gazprom, NLMK, Rusagro, and Sovcomflot substantially.
High borrowing costs add pressure, as Igor Danilenko of Renaissance Capital explained. With rates surpassing 21%, holding onto liquidity for core operations seems prudent.
Export-driven entities also face challenges from a strong ruble. Yaroslav Kabakov at Finam pointed out that a steadfast ruble reduces revenue for metallurgists, oil producers, fertilizer firms, and agricultural businesses.
For further insights on the current economic landscape, you might visit BBC’s coverage on the impact of sanctions on Russia or check Financial Times for detailed economic analyses.
