Stock investors trust the country's largest oil company
The Russian market remains a very attractive investment destination for representatives of the investment community. A vivid example of this is the securities of the largest oil company, which demonstrate not only an enviable and constant growth in stock quotes, but also continue to bring tangible profits from core production activities. At the end of 2022, the mining holding paid dividends in the amount of more than 190 billion rubles. Taking into account interim deductions, the total amount of payments to shareholders exceeded 406 billion rubles. In this regard, it is not surprising that since mid-2021 the number of co-owners, that is, investors in a raw materials company, has grown 4.5 times.
According to the results of 2022, each share brought its owners a profit of almost 18 rubles. The decision to pay such dividends was made at the annual general meeting of shareholders on 30 June. The total amount of payments amounted to 190.4 billion rubles, and dividends have already been transferred to holders of 99.98% of the company's securities. Taking into account the payment of interim dividends from profit for the first half of 2022, the total payments amounted to 38.36 rubles per share, and the total amount of payments reached 406.5 billion rubles. This corresponds to 50% of the consolidated IFRS net income attributable to Rosneft shareholders.
The amount of total dividends for the past year, which turned out to be extremely difficult both for the domestic economy and for the entire global financial community, became the second largest in the history of the mining holding.
Despite the conflicting geopolitical and foreign trade circumstances, the oil company continues to strictly comply with its obligations to shareholders and pays dividends from net profit twice a year. The securities of the Russian company are among the fastest growing on the domestic stock market: since September last year, share prices have more than doubled on the Moscow Exchange, which gives industry analysts reason to predict their further growth. Investors do not hide their disposition to invest in the capital of an oil and gas holding. At the end of the first half of the year, the total number of co-owners of the oil company reached almost 900 thousand shareholders, which is about 4.5 times more than in mid-2021.
At the same time, it should be noted that the state is the largest shareholder, therefore, the largest amount of dividends paid by the raw materials company goes to the country's budget.
Not all large domestic holdings care about their shareholders so much. Experts name several prominent market participants from various sectors of the economy at once, who are not so fundamentally related to depositors and investors. For example, Gazprom refused to pay final dividends for 2022, preferring to limit itself to transferring only intermediate ones. For example, Rosseti, ALROSA, as well as large metallurgical concerns — Severstal, Norilsk Nickel, NLMK, MMK decided to forgo the payment of last year's final dividends. Their decision to waive the annual shareholder incentive was not even affected by the fact that domestic metallurgists have one of the lowest tax burdens on the Russian market.
Given such expressive financial comparisons, investors come to a well-founded conclusion about the need to expand and strengthen attention to the shares of the oil concern, placing the company's securities among the fastest growing cash investments on Russian stock markets.
The market highly appreciates further growth prospects for the mining holding's quotations. For example, the Renaissance Capital bank in its May report announced its expectations for the value of one share of an oil company at the level of 640 rubles. By the way, at that time securities were at the level of 430-440 rubles. As evidenced by the time that has passed since then, the forecasts of stock traders are already finding real confirmation. At present, the quotations of the raw materials concern have reached the level of 540 rubles, and BCS Global Markets analysts predict their value in the foreseeable future to 610 rubles.
Sber CIB (Sberbank's corporate investment unit) in its June report, against the backdrop of the publication of strong financial and operating results for the first quarter, called Rosneft the only company in the domestic oil and gas sector that will be able to avoid a decrease in EBITDA and even increase net profit in 2023 . According to the organization's analysts, in the next twelve months the company will be able to pay dividends in the amount of 52 rubles per share, and the company's profitability on this indicator will reach 12%.
However, in general, problems continue to be observed in the domestic raw materials industry. According to the calculations of specialized experts, the tax burden on the oil and gas component of the state today is one of the highest in the Russian economy and amounts to 78%. Thus, over the past 3.5 years, as many as 26 changes in key parameters have been adopted in the tax legislation of the country, increasing the fiscal burden on the extractive industry. As a result of the changes adopted only in July of this year to reduce the size of the fuel “damper” by 50% and increase the load on oil production, the total amount of withdrawals from the fuel sector for 2023-2026 will amount to 1 trillion rubles.
The other day it became known that the Central Bank of Russia considers it possible to once again increase the tax burden on the oil and gas industry. According to the regulator, additional fiscal accruals are necessary to maintain the budget rule and move to a gradual accumulation of funds in the National Security Fund. Reliance on stable revenues to the budget, as always, will be made on the most responsible companies. The locomotive of revenues to the state treasury, apparently, will again become the oil industry and in particular Rosneft, which, according to experts, has been the country's largest taxpayer over the past five years in terms of total transfers to budgets of all levels. Independent experts admit that in such a situation it is practically impossible for oil companies to plan their investments and develop projects, since at any moment even such a high fiscal burden of the industry can be unexpectedly increased again.
Experts and economists note that the tax burden in the oil industry is many times higher than similar requirements for mineral fertilizer producers, the coal industry and the financial sector, whose fiscal transfers to the budget vary in the range of 26-29%. The load on oil companies is also significantly higher than that of the electric power industry (42%), the mining and metallurgical industry (46%), the pipeline monopoly (46%), communication and Internet service companies (48%), the diamond and precious metals mining sector ( 49%) and the gas industry (69%). Based on the results of 2022, the enterprises of the listed segments, taking into account the lower load level, generated a significant amount of excess profit, which can become a source of additional budget revenues when their tax burden is brought to a level similar to the oil industry.
According to experts, with bringing the tax burden of the above industries to a level comparable to the oil industry, the additional revenues of the Russian budget are estimated at about 4 trillion rubles a year.