Page 146 - RusRPTSept21

q/q and 3% ahead of us and consensus mainly thanks to the stronger topline. The effective tax rate of 17% also helped to support net income. The bottom line was $2.56bn, up 21% q/q, 9% greater than consensus and we forecasted.
5.3% DY for 1H21 implied. Capex was $1.4bn, below our projection of $1.6bn. FCF before changes in the working capital was $2.9bn (ahead of the $2.3bn we expected). At the same time, the company reported a $1.3bn working capital buildup, which, as it stated during the call, was related to oil price growth (1/4) and implementations of new trading strategies (3/4) by the trading arm. Unadjusted FCF thus came in at $1.5bn. Additionally, the company’s cash interest expense tripled q/q. Due to these effects, adjusted FCF for the dividend calculation came lower than we expected. It implies DPS of RUB339 for 1H21 (a 5.3% interim yield) under the dividend policy (we expected a 6.4% DY under a no working capital buildup scenario). During the call, management said the working capital increase might be reversed in the coming quarters (although the outcome could well depend on the environment).
● Other
Surgutneftegas reported its 1H21 RAS results on 16 August. Revenue was up 72% y/y to RUB848.9bn and cost of sales was up 57% y/y in 1H21. Other income, which should include FX, fell 37% y/y, while other expenses were flat y/y. Net income fell 64% y/y to RUB155.2bn in 1H21. For 2Q21, revenue was up 14% q/q and 129% y/y to RUB451.6bn; cost of sales was up 13% q/q and 111% y/y; and other income was down 32% q/q but up 30% y/y. Other expenses were up 26% q/q but down 22% y/y. In 2Q21, SurgutNG reported a net loss of RUB24.3bn vs. net income of RUB179.6bn in 1Q21 and a net loss of RUB280.1bn in 2Q20. The company’s cash pile decreased by RUB54bn q/q but increased RUB420bn y/y to RUB3.73trillion. In $terms, the cash pile grew to $51bn in 2Q21 from $50bn in 1Q21 and $48.2bn at YE20. The results were in line with our view that the company’s DPS will be down significantly y/y, though the 1H21 net income figure implies a higher DPS than our full-year forecast of RUB0.91/pref. We think the results will not have a material impact on the company’s share price, but there could be questions and a possible lack of clarity around the RUB54bn decrease in the company’s cash pile.
Tatneft reported its 2Q21 IFRS results August 27, coming mostly ahead of consensus. The dividend proposal made yesterday, 26 August, by the BoD
146 RUSSIA Country Report September 2021 www.intellinews.com