Page 129 - RusRPTMay20

MOP cfr Brazil of $285/t (-6%).
PhosAgro. Having touched the 2013 lows of $9.16 the stock is now down 18% YTD. RUBdepreciation among other factors implies 10% upside in 2020F revenues and 40% in EBITDA, on our numbers. On 2020F EV/EBITDA of 5.1x, trades at a discount to peers. 12-mo TP of $13.20/GDR unchanged so we upgrade to Buy on 35% ETR. Possible Chinese export increase is a risk.
Acron. Up 25% YTD, mainly on RUBdepreciation (more than 20%), we believe. However, further short-term gains are limited due to pressured nitrogen prices. Nitrogen price decreases under Chinese export pressure are a risk.
● Other
Russian nickel and palladium producer Norilsk Nickel (​Nornickel​) increased in 2019 investments in ecology projects by 21.6% to RUB39.5bn ($538mn), ​the company reported, according to ​1-Line​. Nornickel’s industrial assets are located in Russia’s Norilsk Industrial District, on the Kola Peninsula and in the Trans-Baikal Region, as well as in Finland and South Africa.
TMK has published its shipment numbers for 1Q20. Following the deconsolidation of IPSCO, the company now reports the shipments of the Russian and European divisions. ​Seamless pipe shipments declined 9% q/q to 505kt, due to lower OCTG (-3% q/q) and line pipe shipments at the Russian division, as well as lower industrial pipe shipments at the European division. Welded pipe shipments declined 1% q/q to 222kt and were supported by higher q/q LDP shipments, which compensated for the decline in industrial welded volumes. In 2Q20, the company expects sales volumes to remain under pressure. Total shipments came broadly in line with expectations. However, the mix was different. Welded shipments were almost flat thanks to the support of the relatively high margin LDP deliveries, while we had expected them to decline. At the same time, seamless shipments were 12% lower than we had expected. Although LDP will, in our view, support TMK’s 1Q20 margins, we still see some risks for profitability in the period due to the substantial drop in high margin OCTG segment deliveries.
9.2.12​ Transport corporate news
Russian trucking operator ​Globaltruck​ posted RUB4.9bn ($66.5mn) in revenues in 2H19 and RUB9.5bn for 2019 overall​, slightly missing expectations, but maintaining a positive average growth of revenue per kilometre (2.6-3%). As reported by ​bne IntelliNews,​ ​in 1H19 Globaltruck’s margins were under pressure​. The company reported RUB263mn net profit in 2H19 versus a loss in 1H19, but it was still down by 25% year on year. At the same time the operator’s cash generation improved, with free cash flow for the full year of RUB775mn versus a negative FCF of RUB162mn in 2018, as the company paused its fleet expansion and cut it instead by 3.5% in 2019.
129​ RUSSIA Country Report​ May 2020 ​ ​www.intellinews.com