Page 187 - RusRPTSept21

EBITDA estimate was mainly due to stronger than expected revenues from crude oil transportation (6.7% above our forecast), lower than expected operating cash costs in the conventional segment and an unexpected contribution from JVs (after the EBITDA loss in 1Q21, due to impairments, they generated $2.5mn in EBITDA in 2Q21, which we did not anticipate).
9.2.13 Other sector corporate news
Sistema reported what we see as a broadly neutral set of 2Q21 results 30 August. Revenue and EBITDA were in line with our expectations and just slightly beat consensus forecasts.
The corporate-center net financial liabilities increased 7.2% y/y to RUB204.4bn, a level at which the company is comfortable and at which there is scope for a further increase subject to M&A opportunities. Binnopharm, Medsi and Steppe remain the IPO candidates, and Sistema could decide on whether to take them public next year. We continue to think that Sistema offers exposure to an appealing collection of assets with solid growth prospects and monetization potential. We reiterate our BUY on the name and note that the stock remains attractively valued, on our estimates, trading at a 60% discount to our target NAV.
Revenue and EBITDA in line with our expectations. Revenue was up 16% y/y to RUB180bn and adjusted EBITDA increased 6.7% y/y to RUB58.5bn, in line with our estimates and 1-2% higher than consensus. As we anticipated, MTS, Segezha and Medsi were the main contributors to Sistema’s y/y top-line and EBITDA growth. We also note the stronger-than-expected revenue performance of Steppe (+77% y/y), which was mainly due to higher export volumes and increased grain prices, as well as the growth in milk sales. Sistema generated an adjusted net loss of RUB3.4bn, which undershot our estimate mainly due to the higher finance costs at the group level, although we do not think the market pays much attention to the company’s consolidated bottom line.
Corporate-center SG&A expands 3.6x y/y to RUB5.4bn. This expansion was due to bonus payments related to the monetization of assets and the reinstated LTI program. Sistema reiterated that it expects its corporate-center SG&A expenses to remain within RUB10-15bn in the mid-term (depending on the amount of
187 RUSSIA Country Report September 2021 www.intellinews.com