EAVEX Weekly

April 15, 2019

Ukraine’s domestic equity index was lower last week, dragged down by UkrNafta’s reversal of its previous generous dividend announcement. The PFTS index slid 5.1% to 537 points. UkrNafta (UNAF) was again in the spotlight after the company decided not to pay out UAH 65 per share, and instead pay no dividend at all from its FY18 net profit of UAH 6.6bn. As a state-owned company, UkrNafta will still be obligated to pay at least 30% of its net profit for the last year to the national budget directly. This situation raises the obvious point that such an uneven profit distribution between the controlling and minority shareholders grossly violates international corporate standards. The UNAF stock fell 12.4% after the announcement to UAH 162 per share. Some support for the stock came from the report that the company managed to increase its crude oil production by 6.4% YoY to 128,000 tonnes in March (900,000 barrels).