Page 12 - FSUOGM Week 48 2021

FSUOGM PERFORMANCE FSUOGM

Gazprom income soars to new record

in Q3 on European gas supply crunch

RUSSIA CORE earnings (EBITDA) at Russia’s state- Wholesale prices at the Dutch TTF hub have
owned gas supplier Gazprom soared to a new soared above $1,000 per 1,000 cubic metres
Gazprom also generated record in the third quarter, against a backdrop during recent months. Gazprom sold its gas on
record free cash flow. of a severe supply crunch on the European gas the continent at an average price of RUB17,840
market that has led to historically high gas prices. ($238) per 1,000 cubic metres in January to Sep-
The company, the world’s largest gas pro- tember, as the majority of its contracts are either
ducer with a share of around a third of the Euro- indexed to longer-term prices at European gas
pean market, reported EBITDA of RUB809bn hubs or oil prices. In the third quarter alone the
($10.8bn) for the three-month period, repre- price was $313.4.
senting an all-time record and 2.4 times more “It is obvious that in Q4 the price of our sup-
than it booked for the third quarter of 2020. It plies to Europe will be significantly higher, which
also marks the sixth consecutive quarter of earn- will have a positive effect on the results of the
ings growth for Gazprom, which was hit harder whole year,” Sadigov said.
than most other suppliers during the coronavi- Gazprom also generated record free cash flow
rus (COVID-19) induced market collapse early of RUB83bn for the third quarter and RUB682bn
last year. for the first nine months of the year, while it man-
Gazprom spokesman Famil Sadigov said the aged to reduce its net debt to EBITDA ratio to 1.2
group anticipated even higher earnings in the by the end of September. It is targeting a ratio of
fourth quarter, as the European market remains 1.0 by year-end.
unusually tight amid low levels of storage, eco- Revenues were also buoyed by higher vol-
nomic recovery, cold weather and global supply umes. While Gazprom has faced accusations of
constraints. withholding gas supply to jack up prices, its sales
The company also generated a record net volumes to Europe and other countries outside
income of RUB581.8bn ($7.8bn) for the third the former Soviet Union increased to 175.7bn
quarter, marking a reversal from a RUB251.3bn cubic metres in the first three quarters of this
loss a year earlier. Net profit too is expected to year, up from 154.4 bcm in the corresponding
climb higher during the remainder of 2021. period of 2020. ™

Tatneft posts strong cash flow in Q3

RUSSIA RUSSIAN regional oil major Tatneft of the Tatar- of the company’s ongoing overhaul of its Strat-
stan republic showed $4.4bn revenues in 3Q21 egy 2030, which BCS GM expects to be ready for
Tatneft is expanding under IFRS, EBITDA of $1bn and net income board review by year-end.
downstream. $0.7bn, with the top line being in line with In September 2018 the company approved
expectations, but earnings and net income below a 2030 strategy, which targeted more refining
consensus expectations by 3-5%. and downstream segment exposure, including
Previously in November the company the construction of a RUB70.6bn gas chemical
resumed the practice of paying dividends for complex by 2024. Tatneft has already increased
the third quarter, while confirming the dividend its spending in the downstream. ™
policy.
BCS Global Markets commented that Tatneft
missing the expectations was offset by strong free
cash flow in the reporting quarter. The FCF came
in at $0.75bn, more than 121% versus an average
of $0.34bn/quarter the previous six periods, and
also better than the $0.38bn of 2Q21.
"Given balance between slightly disappoint-
ing earnings numbers but very solid FCF, we
consider this a neutral event for the stock," BCS
GM commented, while maintaining a Buy call
on Tatneft's ordinary and preferred shares.
The analysts suggested focusing on the status

P12 www. NEWSBASE .com Week 48 01•December•2021