According to the regulation on dividend policy adopted by the Magnitogorsk Iron and Steel Works, either all or part of the free profit may be spent on payments to investors. The decision is made based on the volume of financial obligations fulfilled by the company.
Net Debt / EBITDA Dividend fund size
< 1 ≥ 100% free profit
> 1 ≥ 50% of unused profits
Meat processing plant "Cherkizovo" allocates at least 50% of adjusted net profit for dividend payments. The calculation excludes receipts and expenses from revaluation of bioresources and agricultural products. Changes in the cost of meat of animals and plants can radically affect profitability indicators.
Meat processing plant "Cherkizovo"
In its current investment policy, Norilsk moj database Nickel sets the dividend fund threshold at 30% of EBITDA. Strategic plans provide for the possibility of increasing payments to 60% of the same indicator (depending on the net debt/EBITDA multiplier).
The values of Norilsk Nickel's dividend policy:
Net Debt / EBITDA Dividend fund size
< 1.8 60% of EBITDA
1.8–2.2 30–60% of the same indicator
> 2.2 30% of EBITDA
PhosAgro sets the boundaries for the formation of the dividend fund at values from 50% to 75% of unspent profit. The quotient obtained by dividing the amount of net debt by the EBITDA indicator is used. The frequency of payments is high - at the end of each quarter.
PhosAgro Company
The values of PhosAgro's dividend policy:
Net Debt / EBITDA Dividend fund size
< 1 Not less than 75% of unused profits
1–1.5 From 50 to 75% of the same indicator
> 1.5 No more than 50% of unused profits
Enel Russia uses the DP regulation adopted for the period from 2020 to 2022. The volume of the dividend fund is fixed and equals 3 billion rubles in monetary terms, which is 0.08 rubles per share.
These data clearly show that dividend policy is a multidimensional concept that depends on many factors. Each company forms it based on its current and strategic objectives, type of business activity and other conditions. In any case, the main principle remains unchanged: achieving a balance between the need to use profits for the development of the company and increasing the profitability of shares.