Page 11 - FSUOGM Week 18 2021

FSUOGM PERFORMANCE FSUOGM

Another big contributor to the group’s consol- 9% year on year to UAH66.3bn ($2.39bn) and
idated EBITDA was Ukrnafta, the EBITDA of net debt reached UAH29.2bn ($1.05bn) as of
which reached UAH9.6bn ($345mn), up from end-2020, compared to net cash a year ago. Its
losses in 2019. Its negative EBITDA in the com- net debt to adjusted EBITDA was 1.3x as of
merce segment increased 64% year on year to end-2020.
UAH15.8bn ($569mn). “The key drivers of the company’s 2020 neg-
The company’s losses before tax reached ative bottom line were receivables provisions
UAH14.0bn ($504mn) in 2020, compared to of UAH42.6bn [$1.53bn], up 6.7x year on year,
UAH4.9bn ($176mn) profit in 2019, and net and impairment losses of UAH8.0bn ($288mn),
losses amounted to UAH19.0bn ($684mn), down 16% year on year,’ an analyst at the Kyiv-
compared to UAH2.6bn ($94mn) a year before). based Concorde Capital brokerage said in a
According to the company’s press release, its research note. “Such cost items were partially
adjusted net profit was UAH3.2bn in 2020. compensated by UAH32.2bn ($1.16bn) in
“If there were no debt crisis inflicted by the received compensation from the government
inefficient state regulation of natural gas prices, for its PSO losses.”
the group would have been profitable in this The note continues: “Net of the above
tough year,” Kobolev commented. items, the company’s profit before tax would
The company’s operating cash flow before be UAH4.3bn ($155mn) in 2020, which is still
working capital changes was UAH61.0bn not encouraging, as the comparable number for
($2.19bn) in 2020, down 62% year on year. It 2019 would be UAH20.8bn ($748mn). Some
generated UAH19.5bn ($702mn) in cash from higher expected achieved price for natural gas
operations, down 82% year on year, and used should improve the company’s margins in 2021.
UAH22.8bn ($820mn) in cash for investments, Its cost-cutting measures will be also helpful for
down 3% year on year in 2020. Its financing cash this year’s results but are likely to undermine its
outflow was UAH50.5bn ($1.82bn), up 3x year growth, especially in the E&P segment. That
on year, which was a result of the net repayment said, we see that in the 1- to 2-year horizon,
of debt and payment of heavy dividends, which Naftogaz will maintain its strong balance sheet
were worth UAH39.5bn ($1.42bn), up 91% y/y). and slightly improve its operating margins,” an
Its end-2020 cash position was UAH37.1bn analyst at the Kyiv-based Concorde Capital bro-
($1.33bn), down 52% y/y. Its total debt increased kerage said in a research note. ™

Rising gas production seen boosting

Ukraine’s GDP growth by 3% per year

UKRAINE has a gas deficit. It has to import
some 15bn cubic metres (bcm) of gas every year,
which it used to get from Russia, but now buys
from its partners in Western Europe. But the
imports remain huge drain on the budget. Now
the national gas company Naftogaz has started
a drive to increase the amount of gas Ukraine
procures and close the deficit.
Ukraine is not rich in gas deposits, but it does
have two sizable basins in the east and west of
the country that already produce some 20 bcm
a year, meeting just over half the country’s needs.
As part of the renewed privatisation process
the government has been auctioning off rights
to explore and produce gas using its ProZoro
online auction system and investors have been
taking an interest. Ukraine imports some 15bn cubic metres of gas every year (File Photo)
The implementation of the existing project
portfolio of Ukrainian gas producing companies creation of 22,000 new jobs in the industry, a rise
could lead to an increase in gas production to 30 in budget contributions of UAH145bn ($5.2bn)
bcm of gas per year for 10 years, which will allow and of GDP growth by UAH345bn ($12.4bn),
the country to cease its imports completely, Naf- the company said.
togaz said in a press release on April 28. Such It was basing its estimates on a study it com-
an increase in production would lead to the missioned from KPMG in Ukraine..

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