Page 8 - FSUOGM Week 14 2021

FSUOGM PERFORMANCE FSUOGM

Tatneft posts 33% decline in

profit in Q4 2020

RUSSIA RUSSIAN regional oil major Tatneft of the Tatar- BCS GM analysts also anticipate an update
stan republic posted $2bn of revenues in 4Q20, on the status of ongoing negotiations with the
Tatneft's dividend with Ebitda and net income down by 18% and government about high-viscosity oil tax breaks
payments have been in 33% quarter on quarter at $0.65bn and $0.33bn following President Putin's recent directive to
limbo. respectively, missing consensus expectations by the government to revisit the issue.
14% and 29%. Tatneft's divided payments have been in
BCS Global Markets commented that the limbo. It was notably the first Russian oil com-
q/q decline in profitability was expected, as pany to cancel its dividend for 4Q19, citing the
it had been seen with peers Lukoil, Gazprom impact of the coronavirus (COVID-19) pan-
Neft and Rosneft. However, the decline in demic. But it had since indicated it would con-
Ebitda and bottom line was "noticeably larger tinue payments up to the end of 2020.
than expected," and considered a negative "We believe the miss on operating numbers
event for the stock. should not impact the dividend, which will be
Free cash flow (FCF) for the quarter stood at the key catalyst for the stock, as FCF remained
$0.42bn, flat versus an average of $0.42bn per strong," Sberbank CIB commented on April 1.
quarter seen in the previous six periods, and The analysts at Sberbank CIB have not
better than the $0.29bn posted in 3Q20. changed the dividend expectations (decision
BCS GM analysts suggest focusing on an expected in April) for a 2020 dividend per share
update on how the loss of tax breaks for high-vis- of RUB43 (making a 7% yield). The analysts also
cosity oil and highly depleted fields will affect Q1 expect "a significant performance improvement
margins. in 1H21, which should also support the dividend
As reported by bne IntelliNews, Tatneft is payout for 2020."
the company most exposed to the proposed BCS GM analysts in their dividend basket
raising of the Mineral Extraction Tax (MET) on report of April 1 expect a solid payout of RUB72/
high-viscous oil and other proposed reforms to share for Tatneft, roughly equally split between
the taxation of the oil sector. The management the final 2020 dividend and the interim dividend
estimated the losses at RUB80bn ($1bn). for 2021, bringing a total 13% yield. ™

P8 www. NEWSBASE .com Week 14 07•April•2021