Page 156 - RusRPTApr21

year if all of the planned launches of new units are completed.
Based on the most recent updates from the management, Tatneft planned to raise refining throughput at Taneco to above 12mn tonnes this year, with diesel output jumping 70% to 6mn tonnes. The Taneco development plan is well on track toward the targeted increase in annual refining throughput to above 15mn tonnes, and the light product yield is expected to reach 85% in 2022-23. The active unit completion and launch program for 2020-21 included a 1.1 mtpa catcracking facility, a 3.7 mtpa middle distillate hydrotreatment facility and a 2.0 mtpa delayed coker. The company launched the hydrotreater at the end of last year, while the catcracker was scheduled for launch in 1Q21.
If the delayed coker is completed and launched by the end of this year, the company could theoretically increase its refining throughput to 15- 16mn tonnes in annualized terms by the end of the year, in our view. We believe that the completion of downstream projects and the resulting increase in both refining throughput and light product yields are among the strongest fundamental catalysts for increasing the company's valuation. Based on our model, the downstream could contribute $1.3bn to the company's FCF starting in 2023 (after a near- zero contribution in 2018-20 due to the heavy investment). If the company is able to complete its downstream investment program by the end of this year, 2022 FCF could come in 20-25% above our current forecast.
9.2.3 Aviation corporate news
Aeroflot reported its 4Q20 IFRS results 10 March. Revenue was down 55.8% YoY to RUB 68bn while EBITDA was negative at RUB 4.2bn, and the airline’s net loss reached RUB 43.8bn.
Revenue was RUB 4.2bn better than we expected due to better-than- expected cargo segment sales. The results in general though were below our estimates, as we expected positive EBITDA of RUB 5.5bn. Net loss was worse than our estimate of RUB 34.5bn.
However, higher-than-expected operating expenses more than offset higher-than-expected revenue. Aircraft servicing and maintenance expenses came in RUB 4.2bn above our expectations, and we also underestimated administrative and general expenses by RUB 1.5bn and fuel expenses by RUB 2.2bn.
Other operating income came in RUB 6.1bn below our estimates. We also noticed that AFLT managed to keep its staff costs under control, resulting in employee expenses being RUB 1.1bn less than expected. We remain cautious on AFLT and keep our HOLD and TP of RUB
156 RUSSIA Country Report April 2021 www.intellinews.com