Shareholder and Investor Relations

KMG’s shareholders

There were no changes in the shareholder structure in the reporting period.

The annual General Meeting of Shareholders, with its roles performed by the Management Board of the Fund according to the applicable law and KMG’s Charter, is expected to approve the following documents:

• KMG’s 2021 annual financial statements (consolidated and standalone)
• KMG’s 2021 net profit distribution procedure
• Amount of dividend per ordinary share in KMG

Dividends

Resolution of the Management Board of JSC Samruk-Kazyna dated 26 August 2021 (Minutes No. 36/21) approved the new JSC Samruk-Kazyna’s Dividend Policy for Subsidiaries.

The Dividend Policy aims at ensuring the balance of interests of the Fund and the Companies, as well as predictability and transparency of the approach to determining the dividend amount and payment terms and procedure.

The amount of dividend payable to the Companies is differentiated according to their maturity and financial and economic position determined based on financial stability indicators.

1. Free cash flow (FCF) is a consolidated cash flow from operations, including dividends of joint ventures net of investment spending on current operations.
2. The Company may reduce the amount of dividend payable by the amount of investments of the Company approved by the Investment Strategy Committee of the Fund and the Board of Directors of the Fund.

The dividend payment timeline is fixed by the General Meeting of Shareholders when resolving to pay out dividends.

JSC National Company KazMunayGas Dividend Policy for Subsidiaries is available on the Company’s website

The Charter of Joint Stock Company National Company KazMunayGas is available on the Company’s website

For more details see the Financial Review section.

Credit ratings

Credit ratings assigned by international rating agencies serve as reliable and independent tools for the Group’s credit assessment. KMG aims at aligning its key financial metrics with target investment-grade long-term ratings and exceeding them. The Company provides rating agencies with access to all information necessary for a comprehensive and reliable evaluation of the Group’s creditworthiness. Rating agencies and KMG’s Management Board hold regular review meetings, and KMG maintains the contacts.

In addition to the Company’s operating and financial results and market environment, KMG’s credit ratings are linked to Kazakhstan's sovereign credit profile as its change may impact credit ratings of Kazakhstani companies, including KMG.

In 2021, despite material external economic risks, Fitch and S&P affirmed their earlier ratings. Currently, the Company has investment-grade credit ratings from Moody's and Fitch and is two notches below the sovereign rating according to S&P.

• On 28 January 2021, following the revision of its risk assessment for the oil and gas exploration, production and refining sector, S&P affirmed KMG’s credit rating at BB with a negative outlook.
• On 30 April 2021, S&P affirmed KMG’s credit rating at BB with a negative outlook.
• On 12 August 2021, Moody’s upgraded KMG’s credit rating from Baa3 to Baa2 due to an upgrade of Kazakhstan’s sovereign rating. The rating outlook was changed from positive to stable.
• On 20 September 2021, Fitch Ratings affirmed KMG’s long-term issuer default rating at BBB– (one notch below the sovereign rating) with a stable outlook.
• On 26 November 2021, S&P affirmed KMG’s credit rating at BB, after the transfer of JSC KazTransGas directly to JSC Samruk-Kazyna, with a negative outlook.
• On 23 December 2021, Moody's affirmed KMG’s credit rating at Baa2 with a stable outlook.

Change in KMG’s ratings

Bond issues

As at 31 December 2021, KMG’s consolidated debt (expressed in USD) was USD 8,760 mln, including USD 6,250 mln (71%) in bond issues.

KMG Group’s projects are largely financed through its own net cash flows. At the same time, KMG and its subsidiaries and associates may enter the bonds market, if the conditions are favourable, in order to finance individual strategic projects or to maintain financial stability as per the Company’s financial strategy.

KMG borrows both on the national and global capital markets in line with its flexible and balanced debt management policy. KMG bonds are among the most liquid instruments among those offered by Kazakhstan’s issuers. KMG’s FX-denominated bonds have been historically attractive to a wide range of investors. KMG bonds’ investor base includes thousands of institutional and retail investors, mostly based in the USA, Europe and Asia. The Company’s Eurobonds are traded in the London Stock Exchange, the Kazakhstan Stock Exchange and the Astana International Exchange.

For more details see the Financial Review section.

As at 31 December 2021, KMG had six outstanding Eurobond issues at the Corporate Centre level for a total amount of USD 6.25 bln on par value.

Investor Communications

KMG continues to successfully implement its investor relations programme to ensure stability of financing and reduce its cost of capital. Communications with investors involve the Chairman of the Board of Directors, Chairman of the Management Board, members of the Management Board and heads of KMG’s strategic, financial, and operating units, Health, Safety and Environment Department and the Investor Relations unit.

KMG holds quarterly conference calls for investors to discuss financial and operating results with the Deputy Chairman and members of the Management Board, as well as heads of departments. In addition to the quarterly calls, the Company held special one-on-one calls with investors and rating agencies, and also took part in online conferences on the global sustainable development trends and situation in the emerging markets.

The Company adheres to the principles of timeliness, completeness and availability of disclosures for the investment community. Each quarter, KMG publishes quarterly results presentations, financial results, trading updates, IFRS financial statements and analyst databooks. In 2021, the Company continued its practice to promptly inform investors and analysts on KMG’s financial and operating performance upon their request.

Guided by sustainability principles, in 2021 the Company considerably enhanced the transparency of its ESG disclosures. In particular, KMG published its comprehensive 2020 Sustainability Report in 2021. In 2021, the Company’s 2020 CDP Climate Change and Water Security Questionnaires were published on the CDP’s website. In October 2021, Sustainalytics raised KMG’s ESG rating from 69 to 72. The Company’s ESG risk rating was improved from 34.5 to 28.4, moving KMG from the high risk category to the medium risk category and highlighting the Company’s strong positions in managing material ESG risks in the international oil and gas market.

The materials and publications as well as contacts of the Investor Relations are available in the Investors section on the Company’s website.

KMG understands the importance of further enhancing its two-way dialogue with the investment community and regularly conducts investor perception surveys on the Company, with the results reviewed by the Board of Directors.