Russian top miner Nornickel’s board recommended not to pay dividends for the previous year — for the first time in 14 years — due to growing geopolitical risks, which had a negative impact on the company’s finances.
The company recently faced a perfect storm of looming sanctions, external uncertainty, the upcoming payment of windfall tax and the need to rebuild supply chains due to the refusal of many counterparties to work with Russia. The cost of servicing the company’s debt also factored in, Nornickel said.
“This was a difficult decision, which was driven by extraordinary circumstances,” CFO Sergey Malyshev said.
Nornickel paid 411 billion rubles ($5.1 billion) for 2021. It returned to shareholders a sum comparable to its current market cap over the previous 14 years.
The company’s free cash flow shrank by 90% last year to $400 million, while net debt doubled to nearly $10 billion.
The board may consider paying an interim dividend later in the year, subject to a positive cash flow and comfortable net debt-to-EBITDA ratio, Nornickel noted. 
