Page 16 - GLNG Week 07

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Russian gas major Novatek ups earnings 12% in 4Q19
PERFORMANCE
RUSSIA’S second-largest natural gas company and global LNG runner-up Novatek reported 4Q19 Ebitda growth of 12% quarter on quarter under IFRS, beating consensus expectations despite a challenging market environment.
In the reporting quarter, growth in gas sales and a higher LNG price q/q, along with a higher share of LNG sold under the long-term oil-linked contracts, translated into 19% hike in revenue q/q to $3.5bn, beating consensus expec- tations by 5%, BCS Global Markets commented on February 19.
Novatek’s net pro t dropped by 88% q/q to $0.7bn in the 4Q19, due to the abnormally high bottom line of $5.9bn in the previous quarter, when the company cashed in on selling stakes in the upcoming Arctic LNG-2 project to Chi- nese and Japanese companies. e bottom line in 4Q19 was also negatively a ected by a $0.7bn currency loss.
At the same time the company’s free cash ow almost doubled q/q to $540mn, corresponding to 10% cash ow yield.
BCS GM welcomed the results and noted that
Bahrain’s LNG facility completed but gas plans remain in flux
solid 4Q19 performance made the recent sellout in the name seem as an overreaction, reiterating a Hold recommendation on Novatek with target price of $225 per GDR.
e analysts suggest focusing on the current LNG market environment, the launch of the nal fourth train of the Yamal LNG plant, the progress of the next Arctic LNG-2 project, as well as the upcoming changes to the dividend payout.
Last month the CEO of the company and the country’s richest man, Leonid Mikhelson, said Novatek would decide on improving its divi- dends in 2Q20.™
PERFORMANCE
COMPLETION of an import terminal is a sign of progress but has not ended the kingdom’s gas dilemma.
A commercial start-up date for Bahrain’s new LNG facility remains un xed despite it achieving a technical commissioning milestone, as lengthy discussions with potential LNG suppliers rum- ble on. Meanwhile, the cash-strapped kingdom — ill-placed nancially to become dependent on costly foreign energy — is stepping up dec- ades-long e orts to nd and develop indigenous gas resources, with hopes buoyed by a discovery deep below the country’s sole oil eld a few years back.
Bahrain’s LNG import journey began more than a decade ago, when an increasingly acute domestic gas shortage prompted the government
to look overseas to plug the gap. Years of debate over the capacity and form of the import facili- ties — interspersed with periods of political tur- moil — followed and delayed concrete progress until December 2015.
At that point Nogaholding, the invest- ment arm of the government’s national oil and gas authority (Noga), signed a 20-year build-own-operate-transfer (BOOT) contract with a consortium of Bermuda-registered Teekay LNG (30%), Kuwait-based Gulf Invest- ment Corp. (20%) and South Korea’s Samsung C&T (20%) to execute the project as a region- ally novel public-private partnership (PPP), with the state rm holding the remaining shares in the project company and providing o -take guarantees.
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w w w. N E W S B A S E . c o m Week 07 20•February•2020