Metals and Mining

We expect Pivnichny GOK and Centralny GOK to soon report solid FY11 net profits of UAH 6.2bn and UAH 2.6bn, respectively. We presume that both companies will continue their tradition of allotting a large chunk of their earnings to dividend payments, with the announcements expected at the March shareholder meetings. If 100% of FY11 net profits are paid out as dividends, this would correspond to dividend yields of 25% for Pivnichny and 28% for Centralny. We confirm our BUY recommendations for the SGOK and CGOK stocks, with expectations of dividend payouts likely to drive both issues up in the near term, in our view.

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