Page 109 - RusRPTApr20

Russian oil giant Rosneft announced March 26 it is halting its activities in Venezuela and selling its assets there, a country that has been hit by US trade sanctions. “Rosneft announces the termination of its operations in Venezuela and the disposal of its assets, related to operating in Venezuela,” the company said in a statement. Russia however remains a key partner to Caracas. State oil giant Rosneft said it had sold its Venezuelan assets to a company 100%-owned by the Russian government. The interests sold by Rosneft include joint ventures of Petromonagas, Petroperija, Boqueron, Petromiranda and Petrovictoria,” as well as oil-field services companies, commercial and trading operations,” the company said.
Rosneft’s 4Q19 IFRS came broadly in line with us and consensus, with EBITDA and net income both exceeding our forecast by 2%. Although revenues were much higher due to higher crude resales, this did not have any tangible effect on EBITDA and earnings. The 4Q19 net income suggests a 2H19 DY of 3.9%.
● Novatek
Novatek published mixed financial results for 4Q19 IFRS. The company reported two significant one-offs, including the loss from a non-cash revaluation of the fair value of the share in Arctic LNG-2 and a gain on the reorganisation of Arcticgas. Adjusted for one-offs, EBITDA and income came slightly above our forecast and the consensus.
● Lukoil
Russia's second-largest oil producer and independent oil major Lukoil reported 1% quarter-on-quarter decline in revenues in 4Q19 to $30.4bn, in line with consensus expectations. The top line was supported by 4% higher q/q crude oil sales and undercut by 20% lower prices. As reported by bne IntelliNews, the investment case of one of the most valuable Russian oil and gas blue chips in 2019 was further reinforced by the launch of the second $3bn buyback programme and the pledge to pay at least 100% of cash flow in dividends. Lukoil's Ebitda declined by 14% q/q to ($4.4bn) as expected, similar to the momentum demonstrated by domestic peers Rosneft (-12% q/q) and Gazprom Neft (-16% q/q) in 4Q19, BCS Global Markets commented on March 10. Net income in 4Q19 dropped 36% q/q, missing the expectations by 18%, due to $375mn one-off expenses related to assets impairment. At the same time free cash flow (FCF) beat the consensus expectations by 15%, amounting to $2.9bn in 4Q19.
9.2.2 Automotive corporate news
Carmakers Ford Sollers and KAMAZ plan to set up an alliance, which will initially focus on joint projects in component production, the development of new technologies and the digital transformation of marketing and sales, Vedomosti reports. How the alliance will be structured is to be decided by the end of 2020. Increasing cooperation among automotive producers is a global trend, which is often driven by the strong challenges that the industry is facing in developing new technologies (such as electrification, mobility and autonomous drive).
109 RUSSIA Country Report April 2020 www.intellinews.com