OREANDA-NEWS. May 19, 2010. Surgutneftegaz announced a dividend proposal for 2009 of RUB0.45/common and RUB1.0488/preferred share. Both types of shares went ex-dividend yesterday (the company’s AGM record date was 14 May). While the preferred dividend was consistent with the previously announced 2009 RAS income figure (RUB113.9bn), the proposed common dividend was slightly below our expectations, reported the press-centre of OTKRITIE Financial Corporation.

Surgutneftegaz paid out RUB0.60 per common share and RUB1.326 per preferred share as dividends for 2008. Thus, the common and preferred dividends decreased by 25.0% and 20.9% YoY, respectively. The 2008 common dividend was approximately 45% of the preferred dividend, whereas this ratio decreased to 43% in 2009. Surgut’s dividend payment should total RUB24.1bn (USD0.78bn), which represents approximately 21% of the company’s 2009 RAS-based net income. 

View and rating: We are unexcited about the dividend proposal, given the company’s USD22.3bn cash and investments position. We maintain our SELL rating on Surgutneftegaz with a target price of USD0.80/share (USD8.00/ADR).