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midstream and downstream market conditions,” VTB Capital (VTBC) said in a note. The company is hoping for a seasonal recovery of demand by the third quarter of this year, a view shared by analysts. “The reported 2Q19 revenues suggest some 10% downside risk to our 2Q19 EBITDA estimate of RUB30bn. Were sales volumes to remain subdued in 3Q19 (which we cannot rule out), there might be some 10-15% downside to our and the consensus EBITDA forecast in 2019,” VTBC said. “While soft earnings data for 2Q19 and likely absence of improvement in sales figures until August-September suggest further negative pressure on the stock price in the short-term, we reiterate our view of gradual global diamond market recovery in 2020 and hence keep our 2020 forecasts and Target Price of RUB110/share unchanged: Buy reiterated,” VTBC added.
Phosagro published its 2Q19 trading update on July 30. Production of phosphate and nitrogen fertilizers grew by 6% and 4% y/y, respectively, in line with PhosAgro's goal to increase total fertilizer output by 5% this year. Following the strong sales volumes in 1Q19 (which saw a one-off inventory release), 2Q19 sales volumes dropped significantly q/q, with phosphate fertilizer sales down 16% q/q (but only 1% y/y) and nitrogen fertilizer sales down 14% q/q (and 12% y/y). With phosphate and nitrogen fertilizer benchmark prices having fallen 4-8% q/q across the board and PhosAgro's 15% lower q/q sales volumes, we expect revenues to decline 20% q/q to $875mn. As the revenue decline will be driven to a significant extent by volumes, and since feedstock prices (potash and sulfur) fell 2-9% q/q, we expect PhosAgro to sustain a fairly high EBITDA margin of around 33%, with EBITDA coming in at $285mn, down 24% q/q. This would put EBTDA in 1H19 at $651mn. We expect leveraged FCF to decline 47% q/q to $150mn. PhosAgro's 2Q19 financial results are due in late August. We see adjusted net income coming in around $160mn, which, at the high end of the payout range in the company's dividend policy (30-50% of net income), would mean an $80mn quarterly dividend and a 1.7% yield. We note that dividends could surprise to the upside, as in the last three quarters the payout was 61-72% of net income. On the 1Q19 earnings call, the CFO said that the company was going to review its dividend policy at the board meeting at the end of August and potentially link dividends to free cash flow.
9.2.12 Transport corporate news
9.2.13 Other sector corporate news
The joint venture of Igor Rotenberg and state technology agency RT- Invest Transportation Systems (RTITS) could become the only contractor for installing speeding cameras on Russian roads. RTITS is already operating the controversial Platon road tally system, and was suggested as having the necessary scope and scale to undertake the speeding cameras project.
Sanctioned Russian billionaire Viktor Vekselberg increased the capital of his Renova Holding almost two-fold to RUB87.9bn ($1.4bn), Vedomosti daily reported on June 30 citing the state enterprise registrar. It is not specified whether the capital was increased in cash or other assets. This makes the second time this year Vekselberg boosted the charter capital of Renova, increasing it by over a million times to RUB35.78bn in March. Analysts surveyed by Vedomosti previously suggested that Vekselberg could be
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