March 1, 2018 / 9:04 AM / 2 years ago

UPDATE 1-Russia's Evraz swings to net profit, recommends dividend

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MOSCOW, March 1 (Reuters) - Evraz, Russia’s second-biggest steel producer, said on Thursday that higher global prices drove its net profit to $759 million in 2017 after a loss of $188 million in 2016, and helped it to recommend a dividend payment.

The vertically integrated steel and mining company has seen its market value increase more than six-fold since two years ago, on the back of global steel price rises triggered by output cuts at the world’s largest producer, China.

Co-owned by Chelsea football club owner Roman Abramovich, Evraz said that going forward, it aimed to declare dividends of at least $300 million a year and could consider higher payments subject to its financial performance.

“Evraz benefited from an upswing on the global markets, as well as from ongoing strategic initiatives on cost-cutting and product development,” Chief Executive Alexander Frolov said in a statement.

Its 2017 earnings before interest, taxation, depreciation and amortisation (EBITDA) rose 70 percent year-on-year to $2.6 billion, beating analysts’ estimates of $2.5 billion.

Shares in Evraz, which is listed on the London Stock Exchange, were up nearly 5 percent.

Evraz said that its board recommended a dividend payment of $429.6 million, or $0.30 per share. The record date is March 9.

Evraz proposed a surprise dividend in August last year, its first since 2014, when it stopped payments in a drive to reduce debt.

The company’s Chief Financial Officer Nikolay Ivanov told Reuters in an interview in January that dividend payments were likely this year, and said instituting a new policy of regular payouts would be a wise move.

According to its policy, Evraz said on Thursday, no dividend will be paid out if its net debt to EBITDA ratio is above 3.0. The ratio was at 1.5 at the end of 2017. (Reporting by Anastasia Lyrchikova and Polina Devitt; writing by Polina Devitt and Polina Ivanova; editing by Jane Merriman)

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