Page 151 - RusRPTJun21

higher than expected other monetary items and minority interest had a negative effect on profitability, so net income came in line with our projection but 20% above consensus. We calculate that under the 50% payout of straightforward IFRS net income, the results imply a 2.5% non-annualised DY quarterly contribution.
Cost economy boosts EBITDA. Revenues were up 3% q/q to RUB253bn, which was 3% below our forecast. Revenues from oil and product transportation were fully in line with what we expected, rising 2% q/q and 22% q/q, respectively. However, revenues from the oil sales contract (up 16% q/q, and 9% below us), port services (up 4% q/q, and 4% below us) and other activities were lower than our projections. On the costs side, apart from the lower than anticipated cost of goods for resale, lower materials, electricity cost and staff costs supported profitability. The cost economy resulted in EBITDA growing 16% q/q to RUB116bn, 2% above what we expected.
Net income outperforms consensus. Below the operating level, Transneft recorded RUB3.7bn in other income (unspecified, but this other income was lowered RUB0.4bn, an increase in the allowance related to the 2019 Druzhba incident on the back of FX movements) and a RUB2bn net FX gain (we expected RUB1bn). These items were more than offset by other monetary items, slightly lower than expected income from associates (RUB5bn vs. RUB5.8bn expected by us) and greater minority interest. The resulting net income was RUB50bn, up 2.2x q/q and just 1% above our forecast, although 20% above consensus. We calculate that under a 50% payout of unadjusted IFRS net income, the 1Q21 contribution to FY21 DPS is RUB3,479/share, or a 2.5% non-annualised DY. FCF before changes in the working capital for 1Q21 was RUB53bn, above the RUB44bn expected by us due to lower capex (came in at RUB38bn). Overall, we treat the results as slightly positive, given the outperformance on headline net income (which, under the official policy, translates into dividends).
9.2.2 Automotive corporate news 9.2.3 Aviation corporate news
Aeroflot published outstanding IFRS 1Q21 results on May 31.
· Revenues of RUB75bn (4% above consensus, 12% above us). Supported by 11% surge in yields relative to the pre-covid 1Q19 (we expected -2%), thanks to a 90% increase in international tariffs and the decline of 'just' 5% in domestic tariffs.
· This trend is likely to hold in the upcoming financials due to the strong recovery of the Russian market.
· EBITDA at RUB8bn. Margin of 10% is far better than the 3% in
151 RUSSIA Country Report June 2021 www.intellinews.com