Page 153 - RusRPTMay21

9.2 Major corporate news 9.2.1 Oil & gas corporate news
● Gazprom
Gazprom’s 4Q20 EBITDA of $6.5bn was expectedly up significantly (+43%) on 3Q20, while net income recovered from a -$3.4bn loss in Q3 to a $4.8bn gain, helped by below-the-line, non-cash FOREX gains1. Both metrics outstripped both BCS and Interfax consensus estimates. Note 1Q21 should be even better than 4Q20, given the sharp improvement in the European gas market since mid-December
· Revenue of $26.5bn was +3% vs. BCS estimates and +6% vs. Interfax consensus.
· EBITDA of $6.5bn was +14% vs. BCS and +11% vs. the Street.2
· Net income of $4.6bn was 15% above BCS forecasts and 9%
above consensus.
· Net income, as expected, was boosted q/q by a reversal of FOREX losses of Q3, which took net financial costs from a $6.4 loss in 3Q20 to a $1.7bn gain in 4Q20.
· European export sales revenues including trading but net of duties and excise came in at $8.9bn, 20% above our expectations of $7.0bn, +72% q/q albeit -7% y/y, still reflecting a relatively difficult situation on the European gas market (we expect 1Q21 to be substantially better). This may have been boosted by low-margin trading activity, although that will require a more in-depth review of the numbers.
· FCF2 came in at a $3.1bn, expectedly improved on the -$2.2bn of 3Q20.
· Net debt fell 6% to c$52.4bn driven by that FCF number. On a 4Q rolling basis, ND/EBITDA fell q/q from 3.0x to 2.7x, still slightly above the 2.5x limit that would allow the minimum payout requirements in the company’s new dividend policy to be waived,
· Note management decided not to use that option for determining the 2020 dividend, having already recommended a c50% payout and reaching the long-term target a year early.
Gazprom expects revenue to hit RUB7.3trln in 2021. In its budget, Gazprom expects exports to Europe to be 183bcm vs. 175bcm in 2020. EBITDA is
153 RUSSIA Country Report May 2021 www.intellinews.com