MOSCOW (Reuters) - Based on prelimary financial results, the chairman of Russia's largest car maker, AvtoVAZ, said net profit in 2003 will rise sixfold, allowing the company to pay dividends on ordinary and preferred shares for a second consecutive year, a newspaper reported on Monday.
Vedomosti business daily quoted AvtoVAZ Chairman Vladimir Kadannikov as saying the company's output would keep sliding in 2004 as it faces tougher competition with Western producers as Russia's economic growth and personal income rise.
"According to preliminary results, we posted a net profit of around 5.0 billion roubles ($175 million) in 2003. This is more than six times bigger than in 2002," Kadannikov said.
He said he believed the firm's board would recommend paying a dividend for 2003 on both ordinary and preliminary shares.
"I think it will be more than 10 percent (of the net profit) on preferred shares," he said.
The firm paid a total of 219.8 million roubles in dividends in 2002, of which 5.0 roubles were paid on one ordinary share and 17 roubles on one preferred share. Dividends on preferred shares represented more than 10 percent of the net profit.
He said the firm also planned to approve a document fixing a dividend policy, following the lead of other Russian firms in terms of corporate-governance standards.
He said AvtoVAZ would produce 684,800 cars in 2004, down from 699,889 in 2003, when its output also slid because of overproduction in 2002. Revenues are forecast to be 115.3 billion roubles for 2004.
The firm makes Lada cars and has a separate joint venture with General Motors.
Analysts estimated the firm's management controls 53 percent of AvtoVAZ shares, the firm's employees own another 18 percent, state bank Vneshtorgbank holds 8 percent, while the state controls 2.05 percent.
Kadannikov said management would not bid in a forthcoming auction for the state's shares. The firm said last week it was considering placing GDRs on the London Stock Exchange (LSE) this year.