PetroChina Pays Dividends in a Format Similar to Royal Dutch/Shell

We recognize that our analytical style is long on numbers and short on explanation.  As a result, we are grateful to an investor who asks for an explanation after not being able to verify the dividend policy of PetroChina in some other sources.  Our analysis indicated on the masthead a dividend yield for the next twelve months of 7.9% (see http://www.mcdep.com/ptr0518. PDF).  Multiplying Div'd NTM (%) by stock price leads to an expected dividend of $1.71 per American Depositary Share (ADS).  We used the most recent past dividends as an indication of future dividends. 

Past dividend payments are cited in the annual report (see www.petrochina.com and be prepared to decompress a file by the unzip procedure if you choose to download).  On October 5, 2000, the company paid an interim dividend of RMB 0.059042 per ordinary share.  On the basis of 100 ADS's per ordinary share that is 5.90 Renminbi per ADS.  The expected final dividend was RMB 8.22 per ADS.  Choosing an interim and final format, PetroChina emulates the largest non-U.S. publicly traded energy company, Royal Dutch/Shell.  TotalFinaElf, ENI and Norsk Hydro among other overseas companies in our coverage, pay only once a year.     

Dividends declared in home currency are usually translated to U.S. dollars at the exchange rate in effect on the dividend payment date.  The Chinese Yuan (currency) trades at a fixed rate of about 8.28 Renminbi (units) per dollar.  The total of the interim and final dividend is RMB 14.14, or $1.71 per ADS.

Excerpt from June 18, 2001; Meter Reader: Calm Returns