* To recommend "substantially higher" dividends
* Eyes deals in transport, farming, chemicals, energy
* Q3 net profit rises 67 pct to $532 mln
By Anastasia Teterevleva
MOSCOW, Nov 21 Russian oil-to-telecoms
conglomerate Sistema plans to raise dividend
payments even as it expands into new business lines, company
managers said on Wednesday.
Sistema, whose biggest assets are MTS - Russia's top
mobile phone operator - and mid-sized oil producer Bashneft
, is making acquisitions to further diversify its
It recently bought railway freight operator SG-Trans for
$730 million, unveiled plans to acquire European petroleum
product firm Argos and secured regulatory permission to take
over Russian drugmaker Veropharm.
In a third-quarter results presentation, Sistema said
management would ask the board to recommend "substantially
higher" dividends for 2012, a week after its MTS unit pledged to
raise its pay-outs by 25 percent.
"We are acting on the premise that investors want us ... to
share not only future value but also our current cashflow with
them," Mikhail Shamolin, Sistema's chief executive officer, told
However, the higher pay-out, which could be discussed in
mid-December, was unlikely to be on a par with that of MTS, he
Last year, Sistema's dividend stood at 2.7 billion roubles
($86.26 million), or 0.28 rouble per share. Its locally traded
shares were up 0.95 percent at 23.5 roubles on Wednesday,
slightly outperforming the broad market
It received dividends worth $466 million from MTS for the
third quarter of 2012, including $377 million from Bashneft and
$42 million from oil firm Russneft in which it owns a 49 percent
Sistema's third-quarter net profit rose 67 percent
year-on-year to $532.2 million, driven by strong earnings at MTS
and Bashneft, and would have doubled to $653.2 million excluding
an impairment charge related to an Indian unit.
Revenues rose 1 percent to $8.8 billion, held back by a
weaker rouble - its main operating currency - against the
dollar, while underlying sales in roubles were up 11.3 percent.
Adjusted operating income before depreciation and
amortisation (OIBDA) increased by 10.4 percent to $2.4 billion
for a 27.6 percent margin.
Sistema also has a presence in agriculture, high technology,
retail, banking, aerospace, media and healthcare.
Shamolin did not rule out that Sistema could go ahead with a
placement of additional shares to finance acquisitions and
consider a new share buy-back pending merger plans.