Page 147 - RusRPTSept21

seems to have disappointed the market, so we think the results will not bring a material reaction.
Tatneft’s oil production was up 8% QoQ and 17% YoY to 6.97mnt. Refined product output at Taneco was up 8% QoQ and 5% YoY to 3.03mnt. Volumes of crude oil sales were up 15% QoQ and 25% YoY to 4.7mnt, with only domestic sales seeing an increase QoQ. Refined product sales were up 9% QoQ and 4% YoY to 3.6mnt, with only domestic sales up QoQ. Due to higher commodity prices and sales volumes, revenue was up 21% QoQ and 128% YoY to RUB 311.1bn, outpacing our estimate by 8% and consensus by 5%. Our miss was in part due to crude sales by geography, as we had FSU and domestic sales decently below the actual reported figure.
Total non-banking costs were up 21% QoQ and 2.2x YoY. The main QoQ increases were seen in purchases, transport and taxes other than income. Mineral extraction tax (MET) rose 38% QoQ, while property tax and other taxes came down. In YoY terms, MET jumped 5.7x, as the company got tax breaks for high-viscosity oil (HVO) in 2020. The reverse excise tax “benefit” grew from RUB 10.5bn in 1Q21 to RUB 15.3bn in 2Q21. Lifting costs fell 8% QoQ to RUB 250.9/bbl due to lower per-unit fixed costs linked to higher production levels, according to the accounts. Refining expenses fell 11% QoQ to RUB 1,792/t on the back of changes to the product mix and costs. EBITDA improved 15% QoQ and 120% YoY to RUB 75.6bn, implying an EBITDA margin of 24%. EBITDA was also ahead of our estimate and consensus.
Above the bottom line, total net interest, fees and commissions from banking activities improved from RUB 77mn in 1Q21 to RUB 351mn. Tatneft booked a RUB 1.6bn FX loss, and we saw a decrease of more than 2x QoQ in non-banking interest income. That said, net income was in line with our estimate and 2% behind consensus, increasing 12% QoQ and 176% YoY to RUB 48.6bn. Net income for 1H21 increased more than 2x YoY to RUB 92.2bn.
Yesterday, 26 August, the BoD proposed paying out an interim dividend of RUB 16.52/share (ord and pref), equivalent to 50% of RAS net income. The payout would be 42% of 1H21 IFRS net income. The record date is 12 October, and the implied interim yields are 3.4% for ords and 3.6% for prefs. Our forecast for the FY21 dividend is RUB 42.6/share, implying RUB 26.08/share in dividends for 2H21, and
147 RUSSIA Country Report September 2021 www.intellinews.com