Page 137 - RusRPTJul21

volumes could decline 2% y/y in the next farming year to 49mnt. Both figures would imply robust results, some 4% and 6% above the five-year average.
From June, the grain market sees the introduction of the floating export tariff for grain. It is calculated as 70% of the difference between the indicative price (the arithmetic average of daily price indicators), and $200, with the daily price indicators being based on export contracts. For 17-22 June, the tariff is set at $33.30/t, which is some 13% of the FOB Novorossiysk.
For sugar, we model a 10% y/y uplift in the planting area to 1mn ha and production returning to the mid-cycle level of 6mnt, which would match the domestic intake. We see ending stocks at a five-year low (1mnt as of July) and only easing moderately on growing refining and the state initiatives for duty free sugar import of 350,000 tonnes, or 6% of annual consumption, from 15 May to 30 September.
Since the launch of the current farming year in September, Rusagro’s stock has gained 25%, reflecting the strong results amid price capping initiatives across key segments. We consider the 2021F EV/EBITDA of 5.5x and our base case for a 12-month dividend yield of 11% as appealing. Management said that upon deleveraging, dividends are to be preferred to acquisitions. We believe that price capping will mostly appear in the 1H21 results, while uncertainties over 2H21 and potentially tighter export regimes are downside risks.
9.2.7 TMT corporate news
Yandex and Russian Post are to cooperate in developing logistic services and ecommerce, according to Russian Post. In particular, the parties have agreed the joint launch of express deliveries (within one hour) for parcels and internet orders from post offices, to be carried out by couriers of either Yandex or Russian Post. The companies are also discussing creating a drop-off service for Yandex.Market’s sellers (allowing them to ship goods directly to buyers through Russian Post) and installing changing rooms in post offices (for Yandex.Market clients that buy fashion goods and pick them up at these points).The unique regional presence of Russian Post, with more than 42,000 branches, could well help Yandex to develop its ecommerce logistics, which remains one of the key bottlenecks. We also think that there are strong opportunities in joint delivery services. From this perspective, we believe the potential cooperation is positive.
Russia’s largest online retailer Wildberries has launched direct sales from Belarus, Kazakhstan and China to Russian consumers, the company
137 RUSSIA Country Report July 2021 www.intellinews.com