Page 69 - UKRRptMay21

9.2 Major corporate news 9.2.1 Oil & gas corporate news
Naftogaz reports 25% decline in EBITDA, large losses in 2020. Naftogaz of Ukraine (NAFTO) increased total revenue 27% y/y to UAH193.0bn in 2020, according to its annual accounts released on April 27.
Naftogaz cut its capital expenditures by 44.5% last year, to $54mn, from $99mn. The biggest area, exploration and production, fell by 26%, to $39mn. Oil and gas production by Naftogaz, the nation’s largest producer, has been stagnant for the last several years.
Its revenue from sales of goods and services increased 6% y/y to UAH159.2bn, while most of its core segments showed a decline in sales. Key contributors to its revenue were oil and gas E&P (UAH55.9bn revenue, down 28% y/y), the commerce segment (UAH75.5bn, down 31% y/y), the Ukrnafta segment (UAH35.5bn, up 26% y/y) and intermediation in the transit of Russian gas (UAH46.7bn revenue, a new segment in 2020).
The company’s adjusted EBITDA decreased 25% y/y to UAH23.4bn in 2020 as its key segment, E&P, showed a 36% y/y EBITDA decline to UAH28.0bn. Another big contributor to its consolidated EBITDA was Ukrnafta, the EBITDA of which reached UAH9.6bn (up from losses in 2019). Its negative EBITDA in the commerce segment increased 64% y/y to UAH15.8bn.
The company’s losses before tax reached UAH14.0bn in 2020 (vs. UAH4.9bn profit in 2019) and net losses reached UAH19.0bn (vs. net profit of UAH2.6bn a year before). According to the company’s press release, its adjusted net profit reached UAH3.2bn in 2020. “If there were no debt crisis inflicted by the inefficient state regulation of natural gas prices, the group would have been profitable in this tough year,” the company’s CEO Andriy Kobolev commented.
The company’s operating cash flow before working capital changes reached UAH61.0bn in 2020, down 62% y/y. It generated UAH19.5bn cash from operations (down 82% y/y) and used UAH22.8bn cash for investments (down 3% y/y) in 2020. Its financing cash outflow was UAH50.5bn (up 3x y/y), which was a result of the net repayment of debt and payment of heavy dividends (UAH39.5bn, up 91% y/y).
Its end-2020 cash position was UAH37.1bn, down 52% y/y. Its total debt increased 9% y/y to UAH66.3bn and net debt reached UAH29.2bn as of end-2020 (vs. net cash a year ago). Its net debt to adjusted EBITDA was 1.3x as of end-2020.
The key drivers of the company’s 2020 negative bottom line were receivables provisions of UAH42.6bn (up 6.7x y/y) and impairment losses of UAH8.0bn (down 16% y/y). Such cost items were partially compensated by UAH32.2bn in received compensation from the government for its PSO losses. Net of the above items, the company’s profit before tax would be UAH4.3bn in 2020, which is still not
69 UKRAINE Country Report May 2021 www.intellinews.com