Page 79 - UKRRptSept21

JKX Oil & Gas reported a 13% y/y increase in net revenue to $39.5mn in 1H21, according to its interim results released on August 9.
The company raised its revenue in Ukraine 18% y/y to $31.5mn, which is a result of a 69% y/y increase of the average price of hydrocarbons. In Russia, the company’s revenue decreased 4% y/y due to the same decrease of natural gas prices.
The company’s operating profit increased 5.7x y/y to $13.2mn, including a 3.4x growth in Ukraine to $13.1mn. The increase was a result of higher revenue, some positive effect of exceptional items (which added $1.8mn to the profit in 1H21, vs. negative effect of $1.1mn a year ago) and significant decrease of D&A expenses. The company’s EBITDA (before exceptional items) increased 18% y/y to $17.3mn, while the EBITDA margin improved 1.9 pp to 43.9% in 1H21. Its bottom line increased 6.5x y/y to $9.9mn.
JKX generated $14.8mn in cash from operating activity (up 64% y/y) and decreased cash outflow from investment activity (to $3.4mn or 63% y/y) and financing activity (to $0.2mn, or 96% y/y) in 1H21. In this way, it increased its cash balance by $11.1mn to $36.2mn in 1H21.
In 2H21, the company is planning to drill one new well in Ukraine at its Rudenkivske field (to start in September), where no drilling has occurred since 2010, according to the company. No other new wells are planned by the company.
“The beneficial price situation on Ukraine’s natural gas market allowed the company to improve its profits despite a 23% y/y decline in hydrocarbons output in 1H21. High prices are likely to be sustained over the remainder of 2021, too, which will allow the company to further generate large cash flows. The company’s decision to invest into drilling in the Rudenkivske field looks brave but risky, taking into account that earlier attempts by the company to develop this field (in 2017) were not successful. However, if the drilling is successful, it would significantly add to the company’s value,” an analyst at the Kyiv-based Concorde Capital brokerage said in a research note.
9.2.2 Automotive corporate news
Avtovaz plans to launch five new automobiles within the next four years, says the chairman of Avtovaz Nicolas Maure. The next generation of Niva will become one of the new models. Maure has also promised the debut of a new B-segment line.
“There are four important years ahead of us, within which we have plans to launch five new Lada automobiles, as well as new Renault models. The Lada debutants will be the new generation of Niva, and a completely new B-segment line” – Maure said.
79 UKRAINE Country Report September 2021 www.intellinews.com