Annual Report 2007 - Severstal

Business review
Dividends, 2007
Dividends
Starting
Record Ex- dividend per share date for
Period date date (roubles) payments
Interim dividends 18 May 18 May 5 July
for 3 months 2007 2007 2007 2.6 2007
Interim dividends 20 August 20 August 3 October
for 6 months 2007 2007 2007 10.0 2007
Interim dividends 14 November 14 November 20 December
for 9 months 2007 2007 2007 2.5 2007
Dividends 15 May 15 May 3 July
for 12 months 2007 2008 2008 4.0 2008
Dividend policy:
– Dividend payments are made on a quarterly basis
– Satisfactory annual profits are the preliminary condition for
dividend payment
– In determining the size of annual dividends we take into account
the cyclical characteristics of the industry. The size of dividends
can change depending on the volume of net profits and the
company’s cash flow
– In the medium term, the company foresees dividend payments
of no less than 25% of net profits received at the end of the
reporting period, calculated under IFRS
– In the long term, the company has the right to increase the size
of the dividend payments provided that the condition that
capital expenditure requirements are met
– The company has the right to decide to pay out interim dividends,
provided that it is in a financially stable condition at the time.
Bonds
In 2007, Severstal fully redeemed its first rouble-denominated bond
issue, worth 3 billion roubles, which was placed in 2003. There are
currently two 2004 Eurobond issues on the market, and the
Eurobonds profitability tracks the market. In the first half of 2007,
yield to maturity declined slightly, reflecting the growth of the
issuer’s reliability. In the second half of the year, the trend
reversed, as the capital markets in general (and the debt
markets in particular) became more unstable.
Eurobond credit ratings
During 2007, the principal rating agencies upgraded the credit
ratings of Severstal bonds, confirming the company’s high level of
reliability. Standard & Poor’s upgraded Severstal Eurobonds to BB
(with a stable forecast), while Moody’s upgraded the bonds to Ba2
(stable forecast). Fitch did not review ratings in 2007.
Standard Fitch Moody’s
& Poor’s
Severstal-2009 BB – Ba2
Severstal-2014 BB BB– Ba2
58 Severstal Annual Report 2007