Page 14 - FSUOGM Week 23

FSUOGM PERFORMANCE FSUOGM

Lukoil maintains positive cash

flow in Q120

RUSSIA RUSSIA’S Lukoil reported a 16% quar- turned into net debt of $1.8bn, as H1 2019 $2bn
ter-on-quarter decline in IFRS revenues in Q1 dividends were paid in January, just partly offset
Lukoil’s revenues were 2020, along with an 8% q/q dive in Ebitda to by positive FCF during the period.
relatively firm given the $2.3bn, and a net loss of $692mn versus $1.9bn “Weak profit and loss met our conservative
circumstances. profit in the Q4 2019. expectations after the 18% q/q drop in Brent
The revenues remained resilient despite an price, export duty lag, revaluation and FX loss,”
18% decline in oil prices and an 8% decline in oil BCS GM notes, expecting the weakness to con-
product sales, but Ebitda took a hit from the neg- tinue in 2Q20, given the record low oil price in
ative effect of export duty lag and revaluation of April-May.
inventories, along with the drop in oil price, BSC Previously in April as Lukoil placed $1.5bn
Global Markets commented on June 4. worth of eurobonds, BCS GM noted that Lukoil
The bottom line was affected by the same fac- has the strongest credit metrics and highest rat-
tors as Ebitda, as well as the $0.2bn foreign cur- ings in Russia, with FCF in 2019 showing record-
rency loss on lease agreements and $0.7bn assets high numbers despite weak oil prices, while
impairment charge. At the same time its earnings maintaining net leverage close to zero.
decline was on a par with that of peers Rosneft As reported by bne IntelliNews, the invest-
(-41% q/q) and Gazprom Neft (-49% q/q). ment case of one of the most valuable Russian oil
At the same time, Lukoil maintained a pos- and gas blue chips in 2019 was reinforced by the
itive free cash flow of $380mn, albeit 70% q/q launch of the second $3bn buyback programme
lower, partly offset by a seasonal 7% q/q drop and the pledge to pay at least 100% of cash flow
in capital expenditures to about $2bn. Net cash in dividends. ™

Tatneft keeps cash flow in Q120

RUSSIA RUSSIAN regional oil major Tatneft reported a payment of about $0.86bn.
17% quarter-on-quarter decline in revenues in BCS Global Markets commented on June
Tatneft will not pay 1Q20 under IFRS to $3bn, due to an expected 8 that FCF looked strong despite the volatile
dividends for the fourth 18% q/q decline in the oil price and flat sales market environment. Still, the analysts see the
quart of 2019. volume. results as mixed, and expect Tatneft’s results in
As reported by bne IntelliNews, Tatneft has Q2 2020 to be weak, given the low crude price
previously announced that it will not pay div- in April-May.™
idends for Q4 2019 due to the adverse market
situation, confirming the cautious view of the
analysts on the name despite its ambitious 2030
downstream strategy.
At the same time, lower top line was sup-
ported by 16% q/q lower export duty and a 2%
uptick in oil product sales. Ebitda was still down
46% q/q at $0.66bn, underperforming the con-
sensus expectations, but in line with peers such
as Rosneft (-41% q/q), Gazprom Neft (-49% q/q)
and Lukoil (-48% q/q).
But Tatneft maintained positive cash flow of
$0.74bn in Q1 2020, adjusted for working capital
release at $0.4bn, supported by a 32% q/q decline
in capital investment to $0.37bn. Net cash at
end-Q1 2020 remained at about $0.2bn due to
positive free cash flow being offset by a dividend

P14 www. NEWSBASE .com Week 23 10•June•2020