Page 16 - FSUOGM Week 47

FSUOGM PERFORMANCE FSUOGM

Gazprom Neft beats expectations in Q320

RUSSIA GAZPROM Neft, the oil arm of Russian natural quarters.
gas giant Gazprom, posted $7.3bn in revenues "The only surprise was a rise in Net Debt/
The only surprise was in Q3 2020 under IFRS, with Ebitda of $1.75bn Ebitda," BCS GM analysts noted on the increase
a rise in net debt to ($2bn with joint venture contributions) beating of 23% to 1.5x, substantially above the previous
Ebitda. the expectations by 22%. Net profit of $0.4bn was average of 0.75x. Still, the analysts maintained a
17% above the consensus forecasts. Buy recommendation on Gazprom Neft shares
As reported by bne IntelliNews, previously in and suggested focusing on the adaptation of the
the second quarter the company's results were sta- company to the new oil tax regime, as well as the
ble, but the cash flow disappointed the investors. leverage dynamics.
"We had expected a substantial quar- Sova Capital on November 19 also welcomed
ter-on-quarter improvement in results due to Gazprom Neft's return to being cash flow posi-
the improved macro background, and Gazprom tive in the reporting quarter, seeing the results as
Neft didn’t disappoint, reporting Ebitda that was supportive for the name.
+89% q/q in US dollar terms and net income Even though the results are solid, Sova reit-
that was +24% q/q, even if the latter is still well erated a Hold recommendation on the com-
below pre-[coronavirus] COVID-19 levels," BCS pany's shares. The reaction on 3Q20 numbers
Global Markets commented on November 19. is expected by the analysts to be "somewhat
The free cash flow (FCF) also came in strong muted, since the 9M-2020 dividend was already
at about $0.7bn, more than double the average announced at RUB5/share, implying a yield of
of $0.3bn per quarter seen in the previous 6 1.6%." ™
POLICY

German businesses urge Washington to

reconsider Nord Stream 2 sanctions

GERMANY GERMAN businesses have urged Washington Oliver Hermes, chairman of the German East-
to reconsider new sanctions against companies ern Business Association, said on November 23.
Washington is believed involved in the Nord Stream 2 gas pipeline’s con- “Such an approach is completely out of the ques-
to be drawing up struction, warning they could jeopardise the tion among allies.”
additional sanctions. potential reset in EU-US relations when Presi- The US sanctions are in breach of inter-
dent-elect Joe Biden assumes the presidency in national law, he said, calling on the outgoing
January. administration of US President Donald Trump
The US slapped its first sanctions on the pro- to “respect European sovereignty and again to
ject in December last year, bringing pipelaying co-operate comprehensively with German and
to a halt with just 6% of Nord Stream 2’s offshore European authorities.”
section left to complete. The State Department He added that statements by leading Dem-
expanded the sanctions in late October, threat- ocrats “gives us hope for a fresh start in trans-
ening to apply them to any firm “providing atlantic relations under Joe Biden,” but warned
services or facilities or upgrades or installa- that Trump’s team could undermine that new
tion of equipment” for vessels taking part in beginning through its actions over the next two
construction. months.
Washington is reportedly now drawing up Nord Stream 2 links Russia directly with Ger-
additional sanctions, with House and Senate many and, once finished, will carry up to 55bn
negotiators agreeing to target insurers and tech- cubic metres per year of Russian gas. Russia’s
nical certification companies working on the Gazprom owns the project and financed half
project. These sanctions will be included in a of its €9.5bn ($11.3bn) cost, while the rest was
defence bill that must pass by the end of the year, covered by France’s Engie, Austria’s OMV, Royal
sources told Bloomberg. Dutch Shell, and Germany’s Uniper and Winter-
“We have observed since the summer that the shall Dea. The latter two are both members of the
US administration has tried to use its embassies German Eastern Business Association, as is Gaz-
in the EU to put European companies under prom through its German subsidiary Gazprom
pressure and threaten them with sanctions,” Germania. ™

P16 www. NEWSBASE .com Week 47 25•November•2020