Page 100 - bne IntelliNews Country Report: Russia Dec17

expectations by 3%. MMK and other Russian metals and steel majors are in favour this year on the back of rising commodity prices and metal stocks are among some of the best performing and highest dividend payers. Revenue gained in the reporting quarter due to both growth in sales, stable prices, and higher share of domestic sales, Gazprombank commented on November 9. Supported by 3% ruble appreciation in the reporting quarter, Ebitda jumped by 17% y/y to $533mn, with adjusted net income at $303mn, both also narrowly beating the consensus. Ebitda margin stood at 26.5%. In the meantime MMK generated $360mn in free cash flow (FCF) in the third quarter, jumping 77% q/q due to a material release of working capital, while keeping net debt negative at $119mn. The board of directors of the company recommended a third-quarter dividend of RUB1.11 per share, implying a 2.6% dividend yield (10.4% yield on an annualized basis), according to the estimates of Alfa Bank on November 9.
Russian steel major Evraz is considering construction of a $500mn rails plant in the United States , a project for, which it would be eligible for a $17mn state subsidy, the company said on November 27. "This project was not mentioned as part of the pipeline during the Investor Day in October and so we do not think that a final decision has been made on it yet," VTB Capital said in a research note. "Given that the projected output and economics of the project are unclear, and judging from the historical return on investments into new capacity in the US, we believe this might be treated negatively by the market." The possible state subsidy of $17mn is non-material for the name, VTB Capital added.
Russia's uncut diamond major Alrosa reported net income of RUB12.9bn ($218mn) in the third quarter of 2017 , despite the impairment loss due to the flooding accident at the major Mir mine. Company's impairment loss on the mine stood at RUB7.4bn, below the expectations of RUB9bn loss by Gazprombank, which resulted in the net profit beating the banks forecast. Company's revenues declined by 17% q/q to RUB58.9bn, 3.5% above the Interfax consensus. Ebitda declined by 28% q/q to RUB27.2bn, at a margin of 46% in line with analyst expectations. At the same time Alrosa posted free cash flow of RUB4.8bn and increased net debt from 0.3x to 0.7x as of end of the third quarter.
Russian phosphate fertiliser major PhosAgro reported revenues of $788mn, Ebitda of $231mn and net income of $125mn under IFRS in the third quarter of 2017, with the numbers coming slight above the consensus expectations. Previously in the second quarter of 2017 PhosAgro saw its net profit decline by 33% y/y to RUB6.1bn (€88.6mn). The company emerged as a blue chip among Russian fertiliser companies in 2016, and held a successful SPO of 4.5% of its shares in February 2017. In the third quarter PhosAgro's revenues were up 11% y/y to $788mn on 10% higher sales, but the 10% y/y stronger ruble had Ebitda down 15% y/y to $231mn with a 29% margin, down 9pp y/y). The company also announced yesterday a third-quarter dividend (at 3% annualised dividend yield), implying a total January-September payout at 49% of profit (expectedly at the top of the 30-50% dividend policy), as estimated by VTB Capital on November 22.
Russia's uncut diamond major Alrosa reported net income of RUB12.9bn ($218mn) in the third quarter of 2017 , despite the impairment loss due to the flooding accident at the major Mir mine . Company's impairment loss on the mine stood at RUB7.4bn, below the expectations of RUB9bn loss by
100 RUSSIA Country Report December 2017 www.intellinews.com