Page 133 - RusRPTDec21

9.2 Major corporate news 9.2.1 Oil & gas corporate news
● Gazprom
Gazprom’s 3Q21 EBITDA of $11.1bn was up 17% q/q, while Net income of $2.4bn was up 13% q/q and in both cases beat both BCS and Street estimates. We focused on realized European gas prices, which rose substantially to c$314/mcm, +40% q/q, but still came in 10% below our expectation of $350/mcm. We think 3Q21 is only an interim step, as the massive rally in European gas prices should see profitability jump significantly again in both 4Q21 and 1Q22.
§ Revenue mixed: Sales of $32.3bn was -1% vs. BCS estimates and in-line vs. Interfax consensus.
§ EBITDA beat: EBITDA1 of $11.1bn was +2% vs. BCS and +2% vs. the Street.
§ Net income beat: Profit of $7.9bn was 11% above BCS forecasts and 7% above consensus.
§ We estimate Gazprom’s dividend, based on 9M21 net income and including various adjustments, would be cRb27.1/sh, or a c8.0% DY on the first nine months alone. Gazprom does not pay interim dividends, but this theoretical interim dividend would still be far above Gazprom’s full-year record dividend of Rb16.6/sh paid on 2018 results. We expect 4Q21 to be noticeably stronger than 9M21, so Gazprom’s full-year 2021e dividend should easily set a new record in both USD and RUB terms of Rb44/sh or higher.
§ Realized European gas prices came in at $314/mcm, +40% q/q but -10% vs. our $350/mcm expectation and -2% vs. the consensus forecast of $319/mcm. This is still far below current prices of over $1,000/mcm, and we expect significant further price increases in 4Q21 and 1Q22 as Gazprom’s price catch up to market prices after a typical delay.
§ FCF2 came in at a negative $2.2bn, although we expect this to turn positive with the 4th quarter on seasonal factors.
o Net debt increased 3% q/q to c$48.0bn
o On a 4Q rolling basis, Net debt/EBITDA fell 19% q/q to 1.3x vs. 1.6x
the previous quarter.
Gazprom reported strong operating results for 10.5M21 15 November.
Total production for 10.5M12 was up 15.2% YoY to 445bcm, and non-FSU exports were up 8.3% YoY (+12.7bcm) to 164.8bcm.
Gazprom noted an increase in exports to Turkey (+98.1%), Germany (+19.6%), Italy (+18.3%), Romania (+247.1%), Serbia (+92.9%), Bulgaria (+48.2%), Poland (+7.3%), Greece (+13.7%) Slovenia (+53.3%) and Finland (+10.8%).
Deliveries to China via Power of Siberia were 30% above contracted levels, and exports to China hit a historic high of 35.4% more than
133 RUSSIA Country Report December 2021 www.intellinews.com