Page 118 - RusRPTNov19

Reportedly TC LNG Shipping controlled by Cosco and Teekay and operating four tankers has notified Novatek that it is exempt from sanctions.
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Global commodities trader Gunvor has shelved plans to divest a refinery in Germany and an oil product terminal in Russia , following a return to profit, its CEO told Reuters. The Swiss group considered selling non-core assets after suffering its first-ever annual loss of $330mn in 2018 as a result of write-offs and other impairments. It soon recovered, however, posting a gross income of $800mn for the first three months of 2019. After swinging to loss last year, Gunvor put up for its sale its 110,000 barrel per day refinery in Ingolstadt, Germany, as well as a 26% stake in a refined products terminal in the Russian Baltic port of Ust-Luga. With the lift in performance, it now wants to hang on to these assets, which it views as cash cows.
Nostrum Oil & Gas released its 3Q19 operating update. 9mo19 production volume after treatment was 28,877 boe/d. The company said that the Schlumberger and PM Lucas have completed their geological reports and have delivered them to the company. Also, NOG extended its licences for the Rostoshinskoye and the Chinarevskoye fields. The company expects revenues to be in excess of $250mn, its cash position above $91mn and total debt equal or below $1,113mn as of 30 September 2019. GTU3 was technically commissioned following the completion test. The company is to pay the remaining amount due to GTU3 contractors ($14mn) in 4Q19. Production guidance for 2019 was lowered to 28,000 boe/d from 30,000 boe/d, which now corresponds to a sales volume of 27,000boe/d. NOG is to provide an update on 2020 drilling and production at the 3Q19 financial results, which are to be released on 19 November.
Russian oil major Surgutneftegas (Surgut) reported 9M19 Russian Accounting Standard (RAS) profit decline of 80% year-on-year to RUB116bn ($1.8bn). As usual with the company, the bottom line fluctuates on the ruble exchange rate, which appreciated by the end of 3Q19. Company’s revenues revenue grew by 2% to RUB1.18 trillion in the reporting period. BCS Global Markets commented that the decline in net profit was expected, and estimates that that results imply a reduced 12-month dividend yield (12MF DY) of 3.6%. “Roughly 7% of RAS net income annually is distributed among preferred shareholders. The dividend payout from 2019 earnings based on 3Q19 RAS amount to a moderate RUB1.4/share, which implies a 12MF DY of 3.6% DY on preferred shares,” BCS GM wrote, while maintaining a Sell recommendation with a target price of RUB32.9 per share and 26% estimated downside.
9.2.2 Automotive corporate news
Russian carmaker Sollers back on radar screens after Ford’s exit. The cash injection from the dissolved joint venture with Ford and the consolidation of the Ford Transit by Sollers offer some respite amid near-term profitability pressures and UAZ’s capex requirements. Moreover, due to its attractive market positioning the Ford Transit offers longer term opportunities for profitable growth, which is to get a further boost from the model range upgrade at UAZ and better monetisation of the JVs. At the same time, Sollers’ valuation remains undemanding: 2020-21F EV/EBITDA of 3.2-4.0x imply 55-63% discounts to peers. VTBS says the stock deserves to come back onto radar
118 RUSSIA Country Report November 2019 www.intellinews.o