Page 132 - RusRPTNov20

above our forecast. On the cost side, the company largely managed to avoid the seasonal hike in personnel costs, which rose just 2% q/q. Electricity and other costs were also below the values we expected. Overall costs were down 13% q/q (we had expected a drop of just 8% q/q). As a result of the slight outperformance on the topline and sizeable cost economy, EBITDA came in at RUB115bn, down 14% q/q but 9% above our projection and 8% above the consensus.
The Russian government has approved the ‘inflation minus’ approach to Transneft’s tariffs for the next ten years, ​Interfax reports. Under this approach, Transneft’s oil and oil product transportation tariffs are to be indexed by 99.9% of expected inflation every year in 2021-30. The approved methodology for calculating the company’s tariffs coincides with that currently being used and thus does not affect our tariff expectations. At the same time, this approval lifts the uncertainty surrounding Transneft’s regulatory environment. To recap, earlier this year, oil companies and the authorities discussed the possibility of decreasing Transneft’s oil transportation tariffs to the 2008 levels, in light of the drop in oil prices. The Ministry for Economic Development found it feasible to lower tariffs, although other government entities (including the Federal Anti-Monopoly Service and the Ministry of Energy) did not support such a step (see the Morning Comment, of 17 July). In our view, this approval of the long-term tariff methodology puts an end to these discussions and is slightly positive for sentiment on Transneft.
9.2.3​ Aviation corporate news
Aeroflot​ reported on Friday, 16 October, that passenger (PAX) traffic had dropped 45.3% y/y to 10.1mn in 3Q20​, a larger decline than that seen in the market overall (-40.4% y/y to 24.7mn PAX). Aeroflot’s PAX dynamics for 9M20 were also weaker than the market’s, with the airline down 50.7% y/y (23.1mn PAX) and the market down 46.9% y/y (52.6mn PAX). International flights operated by the Aeroflot Group were down 92.5% y/y to 0.6mn PAX while domestic flights were down 7.3% y/y to 9.5mn PAX over 3Q20. RPK for AFLT dropped 55.6% y/y to 21mn RPK. The PAX load factor was down 5.6ppts y/y to 83% y/y in 3Q20. Pobeda managed to increase its PAX traffic 12% y/y to 3.4mn PAX.
9.2.4 ​Construction & Real estate corporate news
132 ​RUSSIA Country Report​ November 2020 www.intellinews.com
Etalon​ has released a strong 3Q20 trading update, with sales growth rebounding to 10% y/y after the 31% y/y decline in 1H20​. We link this pick-up in the figures to the subsidised mortgage programme being rolled out with a 6.5% rate and then its capital limits being lifted 50% to RUB12mn, thus extending the eligibility of Etalon’s offer. As a result, the share of mortgages for apartment sales added 11pp y/y to 64% in 3Q20. The price dynamics were