Page 179 - RusRPTApr23

Extraordinary European pricing faded very fast. BCS never assumed the extremely high gas prices since August 2021 would last forever, but, triggered by a very warm winter, the speed of the collapse, from $1,500/mcm in December to <$500/mcm now, has occurred shockingly fast.
European exports to drop to multi-decade low, may not recover. BCS maintain our assumption of 60bcm of European exports in 2023e vs c85bcm in 2022e and 175bcm in 2021. This massive loss of market share will, at most, be only partially regained after the Ukraine crisis passes.
Current year estimates continue to decline with gas prices. BCS 2023e EBITDA forecast falls by 10% due to the ongoing correction in European gas prices, which have fallen more since our recent update (see Downgrade), but our net income forecasts rise after a reassessment of some items below the operating line. The Street appears to be lagging our downgrades of 2023e and 2024e forecasts.
TP rise, maintained at Hold. Our GAZP TP rises 6% to RUB190/sh on the roll-forward of our model. With an Excess Return of -8%, we maintain our HOLD on GAZP. We expect RUB20/sh dividend on 2023e financials (12% DY).
● Rosneft
Rosneft announced the largest discovery of the oilfield in Russia on the shelf of the Pechora Sea, the Russian oil major said on March 20. Seven new fields were discovered in 2022 in total. "High efficiency of exploration enabled the company to discover seven fields and 153 new hydrocarbon pools with reserves under AB1C1+B2C2 category totaling about 0.3bn metric tonnes of oil equivalent," the company said. "The Madachagskoe Field on the shelf of the Pechora Sea with recoverable oil reserves of 82.3mn metric tonnes under AB1C1+B2C2 category can be categorized as one of the most significant discoveries. This is the largest discovery in Russia in 2022," Rosneft noted.
The net profit of Russian oil major Rosneft fell by 7.9% on the year to 813bn rubles in 2022 due to the impact of external non-cash factors like a transfer of the German assets to external management and changes in the ruble rate, as calculated under International Financial Reporting Standards (IFRS), the company said in a statement on Monday. Earnings before interest, taxes, depreciation, and amortization (EBITDA) gained 9.5% to 2.551 trillion rubles, while the adjusted opeating flow increased by 1.3^ to 2.121 trillion rubles. The company’s capital expenditures grew by 7.9% to 1.1 trillion rubles, but its debt burden shrank by 0.7 trillion rubles. The ratio of net debt to EBITDA remained almost flat in the year at 1.3x as of the end of 2022. The company also said quoting CEO Igor Sechin that its net profit for 2022 would allow the company to continue paying stable dividends. In February, Rosneft paid 216bn rubles in interim dividends, or 50% of the net profit for January–June 2022
179 RUSSIA Country Report Russia April 2023 www.intellinews.com