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9.2 ​Major corporate news 9.2.1​ Oil & gas corporate news
Ukraine’s natural gas producer​ ​Naftogaz​ Group paid UAH87bn to the state and local budgets in January-September 2020​, including UAH39.6bn of remaining dividends for 2019. Revenues from Naftogaz Group exceeded 11.5% of total state budget revenues in January-September 2020. Naftogaz Group remains Ukraine’s biggest taxpayer. In 2019, Naftogaz Group’s tax and dividend payments to budgets of all levels totalled nearly UAH121.4bn.
Cabinet amends​ ​Naftogaz​ charter to comply with IMF commitments. Ukraine’s Cabinet of Minister amended on October 26 the charter document of Naftogaz to bring it closer to OECD principles of corporate governance of the state-owned companies, Naftogaz reported on October 29. Such an amendment was among nine structural benchmarks of the Ukraine-IMF memorandum approved in June 2020 as part of a new $5.5bn SBA program. The key change in the charter was the return of power to the company’s supervisory board in the process of appointing and dismissing the company’s CEO. Namely, the updated charter stipulates that it’s in the authority of the supervisory board to appoint and dismiss executive board members, as well as dismiss the CEO and recommend a new CEO candidate to the shareholders (i.e. the cabinet). Recall, the supervisory board had such power before March 2019, when the cabinet led by PM Volodymyr Groysman ​changed the charter to gain the exclusive right​ to appoint and dismiss the Naftogaz CEO. No doubt, the decision illustrates the good will of Ukraine’s cabinet to implement the commitment given to the IMF and other Ukraine’s Western partners. However, the future of the Ukraine-IMF deal depends mostly on Ukraine’s progress in other areas, including the recovery of the anti-corruption infrastructure that has been damaged in recent months.
9.2.2 ​Automotive corporate news
9.2.3​ Transport corporate news
Germany’s Kostal is building a €40mn automotive electronics plant ​that is to employ 900 workers when it opens next April in Dudarkiv, 15 km north of Kyiv Boryspil Airport. With the new plant, Kostal will double its production in Ukraine. For the last five years, the company has employed 1,000 workers at another electronic components factory, in Pereiaslav, 65 km south of Dudarkiv.
Ukrzaliznytsia​ (Ukrainian Railway) generates UAH9bn in losses in 1H20. Net revenue at Ukrainian Railways (RAILUA) dropped 19% y/y in 1H20 to UAH35.62bn, according to its financial report released on October 21. Its freight segment revenue declined 16% y/y to UAH30.65bn (as freight turnover fell 20% y/y) and its passenger segment revenue plummeted 57% y/y to UAH1.91bn (on a 56% plunge in turnover). The company’s EBITDA fell 54% y/y to UAH3.24bn, based on our estimates. In particular, EBITDA in its freight segment decreased 41% y/y to UAH8.33bn, while operating losses in its passenger segment slid 13% y/y to UAH5.11bn. The company’s bottom line was negative at UAH8.79bn in 1H20 (vs. positive UAH1.07bn a year before), which was a result of lower EBITDA, as well as foreign currency losses of UAH3.41bn (vs. gains of UAH1.68bn a year before). Ukrainian Railways’
64​ UKRAINE Country Report​ November 2020 ​ ​www.intellinews.com