Kyivenergo may again pay healthy dividends this year

Integrated utility company Kyivenergo (KIEN UK) reported a 2013 bottom line of UAH 1.0 bln, according to its AGM announcement on March 21. At its AGM scheduled for Apr. 22, shareholders will consider dividend payments and approval of significant deals, which opens the door to those voted against significant deals to sell their shares to Kyivenergo.

Alexander Paraschiy: While the company’s bottom line appeared to be 2.4x smaller yoy, the company should remain one of the most generous dividend payers in the Ukrainian investment universe. In 2013, the company did not avoid paying generous dividends, despite its 2012 profit having been generated from compensations of losses from previous years. For this year, we expect the company, being an asset in which the state holds a 25% stake, will again pay 30% of its income in dividends. This would imply UAH 2.8 in DPS and about a 29% dividend yield, based on the last deal’s price of UAH 9.5. Since Kyivenergo’s stock is illiquid however, the actual dividend yield could be much smaller.