Page 100 - RusRPTSept20

stronger ruble, ND/EBITDA amounted 6.1x. Bank debt increased RUB18bn in 2Q – ie below BCSe expected RUB30bn+. Such a fact confirms the view that monthly cash burns in 2Q were not above RUB10-12bn, and given RUB30bn increase of bank debt in 1Q Aeroflot had sufficient amount of funds to go through the most difficult times. At the end of 2Q Aeroflot cash position improved, stood at 39bn RB vs RUB26bn as of the end of 1Q20.
§ Despite collapse in traffic, operating cash flow remained positive in 2Q at RUB5.2bn.
§ We believe the results for 2Q20 matter less for the market than upcoming share issue (EGM to approve the details on 11th of Sept) and recovery of passenger volumes in 2H20
9.2.4 Construction & Real estate corporate news
LSR Group (LSR) published 1H20 IFRS results and held a conference call on August 30. The numbers look positive given the operational environment in 1H20. The only negative is that OCF decreased significantly y/y, though the decline was mainly due to one-off factors. Importantly, the BoD recommended a semiannual dividend payment of R20 per share based on the 1H20 results, which we view as a positive for the investment case. P&L items. The company reported revenues of R48.1bn (up 3% y/y), EBITDA of R9.2bn (up 17% y/y), an EBITDA margin of 19% (versus 17% in 1H19) and net income of R2.6bn (up 38% y/y). St Petersburg revenues increased by 31% y/y, mainly due to the strong performance of the flagship mass-market projects Tsvetnoy Gorod and Shuvalovsky. Adjusted EBITDA in St Petersburg was up 54% y/y to R6.7bn, with the margin improving to 32%. Moscow revenues, on the other hand, were down 8% y/y, mainly due to the sale of LSR Group's share in ZIL-Yug in 1H19. Adjusted EBITDA in Moscow decreased to R1.2bn, pressured by the lockdown measures. As a result, the adjusted EBITDA margin there declined to 9% in the period. LSR expects profitability in the capital to recover in 2H20. OCF and leverage. OCF before income taxes and interest paid was R3.6bn in 1H20 (versus R13.6bn in 1H19), down 73% y/y. The sharp decrease was driven by two factors: a high base, as LSR recognized a cash inflow from the sale of its share in ZIL-Yug in 1H19; and the acquisition of land lease rights for the development of the ZILART, Luchi-2 and Ilmensky-4 projects in Moscow in 1H20. LSR's net debt rose 19% over the period to R27.2bn, while net debt/EBITDA climbed to 1.21 from 1.08 as of end-2019. Cash on escrow accounts amounted to around R1.6bn (versus total cash balances of R67bn). The company plans to fully switch to the escrow scheme by 2027. Operational guidance. Despite the pandemic, LSR reiterated its guidance for new sales in 2020: 870k m2 and R95bn. It noted very positive dynamics in new sales in July and August.
PIK reported 1H20 financial results. Total revenues up 34% to RUB138.5bn - broadly in line with BCSe.
Development business increased by 18.7% to RUB106.9bn (-3% vs BCSe) on higher average prices. Non development revenues amounted RUB31.5bn or +135% Y/Y on expansion of fee development, higher exposure to renovation program.
o Gross margins improved in all businesses. In development blended
100 RUSSIA Country Report September 2020 www.intellinews.com