Page 134 - RusRPTJul21

The extractable oil reserves of Surgutneftegas grew by 59.4mn tonnes in 2020 under the ABC1 categories, the company said in a statement on Wednesday. The company discovered 24 new oil formations with total recoverable reserves standing at 4.4mn tonnes under the C1C2 category and one formation on a current deposit. Surgutneftegas produced 54.8mn tonnes of oil in 2020.
9.2.3 Aviation corporate news
Aeroflot’s passenger turnover rose 10x y/y to 3.6mn in May. Strength was largely due to last year’s low base, though the stock reacted positively, similar to the release of good April dynamics. Numbers are still 26% below pre-COVID May 2019, but give a clear indication of recovery.
Aeroflot's 1Q21 results were strong – beating the consensus* – and even above management's guidance, suggesting that they had been overly conservative during the March investor call.
● Results at a glance. The main driver of the outperformance was yield growth: +13% to 4Q20, and +11% to 1Q19. We think that this supports our view that the demand on the Russian market is strong, and that once all restrictions are lifted, total traffic will quickly rebound to pre-Covid levels. It also shows that Russian airlines successfully managed the 11% QoQ growth in fuel prices.
● Pobeda. We were surprised with the results of the lowcoster, which increased its EBITDA margin to 27% in 1Q21 (vs. 20% in 4Q20 and 8% in 1Q19) against the backdrop of aggressive cost cutting. Its EBITDA of RUB 3bn contributed 39% to the Group's total of RUB 8bn.
● Cash burn. We calculate that the monthly cash burn was RUB 5bn in 1Q21. Along with the increase in yields, there was support from PDP refunds and increased bookings. The result was a significant improvement after the RUB 12bn burn in 4Q20.
● Cash position. As of 31 March, Aeroflot’s cash stood at RUB 78bn, and it had RUB 143bn of available credit lines. In addition, the company is considering the placement of at least RUB 15bn of bonds for the sake of funds diversification. With that, we do not believe that the concerns over the company's survival are an issue anymore.
● See other comments on the results in our table.
● Forecast for 2Q21. We expect the next quarter to record a net
loss of RUB 10-12bn vs. RUB 25bn in 1Q21. Coupled with additional refunds of PDP from the arrived A350 and the continued increase in future bookings, this could take cash flows
134 RUSSIA Country Report July 2021 www.intellinews.com