Page 165 - RusRPTJun21

materials and spare parts and begin to repay the arrears Mechel accumulated for suppliers and contractors.
● Fertilisers
● Other
Rusal estimates the cost of its plans to modernise four smelters at RUB 392bn (USD 5.3bn). The company plans to finance 100% of this through loans, and ask the state to offer guarantees for almost 70% (USD 3.6bn). The company did not confirm this information.
9.2.12 Transport corporate news
Sovkomflot’s 1Q21 results were in-line with consensus expectations. (Interfax as of 19 May) and had no effect on the stock. The numbers declined significantly y/y due to the high base of 2020, but were mostly unchanged q/q. We note that the reported loss of $2mn was due to the $16mn impairment. Adjusted NI was actually in the black, $14mn. In our view, it is supportive for Sovcomflot that despite the market being at a 10y low, the company still earns profit. We think that the current market bottom will last for one more quarter. Given April Aframax rates were $9k/day vs. $11k/day in 1Q21, we expect 2Q21 to be broadly the same, with adj. NI of some $10-15mn. 2H21 will be an inflection point, in our view, with the reopening of economies and recovery in fuel consumption. For more details on the results, see our comments in the table below. Our fine-tuned forecasts for 2021F are $1,218mn in TCE revenues, USD 747mn in EBITDA, and $130mn in NI. We reiterate our 12-mo TP of RUB125 and Buy recommendation. The stock trades at 6.4x 2022F EV/EBITDA, 26% below its closest peer, MISC, and 8% below conventional shippers. The ex-date for dividends of $225mn (DPS of RUB6.67, 7% DY) is 2 July.
9.2.13 Other sector corporate news
165 RUSSIA Country Report June 2021 www.intellinews.com