Page 119 - RusRPTJan21

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Globaltrans​ has released a market and business update and reiterated its guidance on the final 2020 dividend of R28 per GDR, to be paid in April. ​In terms of market trends, Globaltrans outperformed the market on freight turnover and prolonged its long-term contract with MMK by two years. Meanwhile, the contract with Metalloinvest -, which now covers 50% of the Metalloinvest volumes versus 70% before - was also prolonged by a year. The company said it has significantly increased volumes from Evraz. Globaltrans reiterated 2021 capex at a limited R6-7bn, mainly for maintenance. No major disposals are expected next year, so there would be no need to replace scrapped fleet. Our view: The company has maintained high fleet utilization in spite of the current excess capacity on the gondola market, though prices are still under a lot of pressure from the excess capacity. The reiterated dividend commitment of R28 per GDR produces a 6% dividend yield. Given that we currently expect Globaltrans to pay a similar dividend from the 1H21 results, we expect total dividends received through 2021 to yield roughly 12%, which should be supportive for the stock.
NCSP excluded from government privatization plan. ​The Russian government has amended its program to privatize federal property in 2020-22. The updated plan no longer includes the sale of the government’s 20% stake in NCSP. Russia owns 20% of NCSP and holds a golden share. The Russian government initially listed NCSP as one of the assets for potential privatization in 2020-22 when it approved the program on 31 December 2019. Transneft is a controlling shareholder in NCSP, with a 63% stake in the company. NCSP continued to generate FCF in 2020. Despite weak operating results on the back of the high base of 2019 and the OPEC+ agreement, NCSP’s FCF for 9M20 amounted to $182mn (-22.8% y/y). Assuming the y/y decline in 4Q20 FCF is in line with 3Q20, NCSP’s FY20 FCF could reach $208mn. According to NCSP's strategy, the company plans to pay out no less than 50% of IFRS net income in dividends, considering its FCF. Assuming that 50% of FCF is used to pay dividends, the yield could reach 5%.
119 ​RUSSIA Country Report​ January 2021 www.intellinews.com