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Eastern Europe
March 8, 2019 www.intellinews.com I Page 15
children. And a new draft law on mortgage holidays has been submitted to the State Duma that assumes a one-off period of six months during which payments are suspended if a person loses their job or is simply having difficulties making the monthly instalments.
The average mortgage duration is currently 206 months and the payment holidays represent 3% of that. Missed payments will increase the overall life of the mortgage, while lower interest rates could lift the blended rate. The Federal Assembly called for a mortgage rate of 8% by 2020 and CBR governor Elvira Nabiullina said at the end of Feb- ruary that this target is realistic. German Gref, the CEO of Russia’s dominant retail bank Sberbank, says that 8% mortgages may appear as soon as next year.
“Next year, I’m sure we will see 8% [mortgages],” Gref said during a conference call with investors on February 28. According to him, mortgage rates will fall by the end of this year, but whether it will be to 8% or 9% will ultimately depend on what happens to inflation.
And the whole business is gathering significant momentum. Of the entire stock of mortgages out- standing, half the total was taken out as mortgage contracts in just the last year – a record RUB3 trillion of deals were signed in 2018, itself a 49% increase on the year before.
The boom in housing credits is already feeding through to the construction business where mortgages now account for 40-65% in the sales of listed homebuilders.
Russian oil major Lukoil posts $2.4bn profit, strong cash flow in 4Q18
IntelliNews Pro
Russia's second-largest oil producer and largest independent oil company Lukoil posted $30.7bn revenues, $4.2bn Ebitda and $2.4bn of net profit in the fourth quarter of 2018, the company said on March 4.
Ebitda and net profit took a 15% quarter-on-quar- ter dip in 4Q18, but the earnings and bottom line still beat consensus analysts expectations by 3% and 8%, respectively.
BCS Global Markets on March 5 commented that for Lukoil's earnings negative impact from lower oil and 5% increase q/q in export duty was partly offset by stronger performance of downstream division in Russia as domestic gasoline prices were in line or even higher than export netbacks for some time.
In the downstream segment, Lukoil performed better than the momentum demonstrated by Rosneft (-25% q/q) and Gazprom Neft (-27% q/q) in 4Q18.
The company made very strong free cash flow (FCF) of $3.2bn in the reporting quarter, due to capital spending remaining flat q/q and working capital release of $1.1bn, which was the biggest positive surprise in the report for BCS.
Sberbank CIB attributed the FCF mainly due
to a hedging gain on product trading volumes (thanks to the oil price dropping almost $30 per barrel during the quarter). Full-year FCF came to $8.6bn, or $9.3bn excluding working capital changes.