The Board of Directors of Severstal recommended not to pay dividends

Earlier, the company decided to temporarily not publish its financial statements for the first quarter of 2022 SeverstalCHMF ₽971.8 -0,39% Buy NLMK NLMK₽150 -0,13% Buy MMK MAGN$39.87 -0.09% Buy87 -0.09% Buy87 -0.09% Buy09% Buy09% Buy

The Board of Directors of Severstal recommended not to pay dividends   for the first quarter of 2022 and the fourth quarter of 2021. The final decision on the payment of dividends will be made at the annual general meeting of shareholders, which will be held on May 20, 2022. This was reported on the website of the disclosure of corporate information.

Shares of the Russian metallurgical company did not react to this news, by 18:00 Moscow time the decrease from the close of the previous session is 0.45%, to ₽971 per share, according to the Moscow Exchange.

Earlier, the management of Severstal recommended to the Board of Directors not to pay dividends for the first quarter of 2022 and the fourth quarter of 2021. The company's management also decided to temporarily not publish financial statements for the first quarter of the year due to the fact that "a significant part of its shareholders are not able to make investment decisions", noting that such disclosure of information may put some stakeholders in a better position in relation to to others. For a similar reason, the Magnitogorsk Iron and Steel Works (MMK) has also decided not to publish its financials for the first quarter of 2022.

In February, the Board of Directors of Severstal proposed to pay for the fourth quarter of 2021 the highest quarterly dividend in the history of the company in the amount of ₽109.81 per share. Severstal has previously paid dividends for the first, second and third quarters of 2021 in the amount of ₽46.77, ₽84.45 and ₽85.93 per share, respectively.

At the beginning of the month, another large steel company from RUSSIA, NLMK, found itself in a similar situation. The company's management recommended not to pay dividends for the fourth quarter of 2021 and the first quarter of 2022. Although on February 3 NLMK's board of directors offered to pay ₽12.18 per share for the fourth quarter. In total, NLMK could allocate $0.9 billion to pay dividends to shareholders.

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Dividends are the portion of profits or free cash flow (FCF) that a company pays out to shareholders. The payout amount depends on the dividend policy. Their periodicity is also spelled out there - once a year, every half year or quarter. There are companies that do not pay dividends, but direct profits to business development or simply do not have the opportunity due to poor results. Stocks of dividend companies are most often of interest to investors who want to achieve financial independence or secure a decent standard of living in retirement. With the help of dividends, they create a source of passive income for themselves. More