Page 130 - RusRPTDec20

reports October-November sugar prices 35% higher vs. 3Q20 (RUB39/kg), with a robust outlook for refineries.
· The farming business saw wheat, sunflower and soy prices going up 33-52% y/y in 3Q20, which meant the EBITDA margin increasing to 41%, from 34% a year ago. We note that the fourth quarter is seasonally the highest and anticipate comments on 4Q20 from management on its trading approach and YE20 inventories during the conference call (+7 495 646 93 15; ID 11257377#).
· For the meat division, volumes were 13% y/y higher on the launch of new capacities in Tambov, while prices added 7%. The EBITDA margin bounced to 32%, i.e. the level observed prior to the last two years, with an accelerated supply from industrial players.
· In 9mo20, the company delivered RUB24.6bn in net operating cash flow and employed RUB10bn in capital expenditures. Net debt / LTM EBITDA went down to 1.9x as of September, from 3.2x as of YE19.
· Rusagro’s GDRs are up 7% YTD vs. the 21% decline in the RTS index and now demand 2021F EV/EBITDA of 6.5x. We see the impressive financials as being sustainable through MY21 (July/June) but see tangible headwinds for a rerating in the FAS investigation of a sugar market cartel.
9.2.7​ TMT corporate news
Yandex​ says it will release a new financial product within the next year​, BMB Russia reported on November 20. Yandex has been trying to break into the world of fintech since the early 2000s. In 2002, the company created Yandex.Money, which it began jointly developing with Sberbank in 2013. However, a joint venture between the two giants ended in​ d​ ivorce​ after only a year and since then they have increasingly become rivals in the fight to win market share in the increasingly digitised Russian economy. Yandex and Sberbank went their separate ways earlier this year, Yandex is still struggling to find a suitable fintech partner or project. Sberbank received 100% of Yandex.Money. More recently Yandex came close to acquiring Tinkoff Bank, owned by TCS Group, that is Russia’s only purely online bank and an investors’ darling. But once again​ ​the deal collapsed​ at the last minute because of an argument over who would run the company. Yandex announced it was “acquiring” Tinkoff Bank. Tinkoff Bank announced the two companies were “merging.” Despite these roadblocks, Yandex remains committed to building a fintech empire—even if it must do so alone. In August, the tech firm registered 33 finance-related trademarks, including YaBank, YaTrade, YaFintech, and YaMoney. There are some hoops Yandex has to jump through
130 ​RUSSIA Country Report​ December 2020 www.intellinews.com