Page 10 - FSUOGM Week 44 2022

FSUOGM INVESTMENT FSUOGM

Tatneft continues to publish results,

posts $0.6bn profit in 9M22

RUSSIA RUSSIA’S regional oil major Tatneft of the Russia’s publicly traded oil and gas companies
Republic of Tatarstan has published Russian could diverge from reality.
Tatneft's results only Accounting Standards (RAS) results for 9M22, BCS GM also notes that according to the
modestly surprised posting net income of RUB33bn ($550mn), previous dividend announcements by Tatneft,
versus expectations. going up by 10% quarter on quarter. the RUB33bn RAS net income booked in the
Notably, Tatneft’s results not only modestly period would imply a second interim dividend
surprised versus expectations, but also “main- on 3Q22 results, of around RUB7/share or a div-
tained its position as the only significant Russian idend yield of 2%.
oil and gas company to publish financials so far Tatneft's IFRS results for 1H22 showed $10bn
this year”, BCS Global Markets analysts com- of revenues, $3.5bn of EBITDA and $2bn net
mented on November 3. profit for the period. Tatneft was also the first
As covered by bne IntelliNews, after Rus- company in the oil and gas sector to announce a
sian oil and gas majors stopped publishing their post-Ukraine invasion dividend and in Septem-
financial results, the analysts warned that inves- ber the company improved its output guidance
tors’ understanding of the financial health of under the 2030 strategy. ™

Lukoil offers interim 2022 dividend,

but will trim payments

RUSSIA IN addition to recommending the RUB357 However, BCS GM expects the softening
per share 2021 final dividend at the December of the dividend policy to be only temporary, as
Lukoil will continue 5 extraordinary shareholder meeting, Russian Lukoil “has a very strong balance sheet, and it
paying dividends, but oil major Lukoil will also propose a RUB256 per should be able to largely deal with any refinanc-
not as large ones. share interim dividend for 2022, the company ing issues in the course of 2022, allowing it to
announced. return to its full dividend policy in 2023”.
Previously, in the summer of 2022 Lukoil Even should Lukoil temporarily lower the
delayed the final dividend payment due to diffi- payout to 50%-75% of FCF, this would still rep-
culties in processing the payments under West- resent a high dividend in the current environ-
ern sanctions for Russia’s military invasion of ment, the analysts believe. Lowering dividend
Ukraine. The company said this week it would payouts to 75% of FCF would free up an addi-
reinstate the 2021 dividend and now suggested tional $2.7bn in 2022, while a 50% payout would
an additional interim dividend as well. free up $5.5bn of cash for the company.
However, the analysts at BCS Global Mar- “This implies a full-year 2022 estimated
kets note that the interim dividend is less than dividend of RUB545/share to RUB1,105/
expected and could signal that Lukoil will pri- share. Including the final 2021 dividend, this
oritise debt restructuring over dividends and implies a 12-month dividend per share of
weaken commitment to the full dividend policy. RUB1,080/share to RUB1,350/share, or divi-
Lukoil stated in its press release that its cur- dend yields of 23% to 29%,” according to BCS
rent dividend policy of 100% of free cash flow GM calculations.
(FCF) was predicated on having full access to As followed by bne IntelliNews, prior to Rus-
international capital markets, which it lost this sia's military invasion of Ukraine, Lukoil rein-
year due to Russia’s military invasion of Ukraine. forced its investment case of being one of the
Therefore Lukoil has “directed a significant most valuable Russian oil and gas blue chips in
amount of own funds to early repayment of debt, 2019 with the pledge to pay at least 100% of cash
repurchase of eurobonds and financing of M&A flow in dividends and by the launch of the sec-
deals.” ond $3bn buyback programme. ™

P10 www. NEWSBASE .com Week 44 07•November•2022