Page 204 - RusRPTApr23

see robust global demand for aluminium, and expect that potential regular dividend payments from UC Rusal will serve as strong catalysts for the name.
Stable aluminium supply, Norilsk’s divis result in deleveraging. UC Rusal keeps delivering aluminium globally without severe disruptions. BCS estimates the company is operating at full capacity and could reroute lost US volumes (4.6% of revenue, per 2022 data) to Asian markets. In addition, expected dividends from Nornickel should cause further deleveraging.
Back to dividend payments on the deleveraging. BCS believe the company’s ND/EBITDA would be at 1.5-2x in M-T thanks to the factors described above. As a result, UC Rusal is able to resume regular dividends with at least 5-7% DY in near future.
Restart of aluminium production in Europe on lower energy costs. European smelters (5% global output ex-Rusal) reduced Al production by 13% y/y last year amid higher energy prices. However, the situation on natural gas market (prices have shrank more than 7x since August’22 peak) allows European industry to gradually restart the production.
Ruble depreciation, dividends from Norilsk provide steady FCF. Expected weakening (vs. previous assumptions) coupled with lower cash costs (after the abnormally high ones during the last year) result in higher profits this year. In a longer term, stable aluminium prices and Nonickel’s dividends, as we expected, still play a key role in robust FCF.
TP slightly down 3%, still BUY. Our DCF-based TP for RUAL decreased 3% from RUB63/sh to RUB61/sh. BCS still anticipate more than 45% upside potential and rate the name with a BUY.
9.2.15 Transport corporate news
9.2.16 Other sector corporate news
Net profit of Sovcomflot under International Financial Reporting Standards (IFRS) soared 10.8-fold in 2022 compared with 2021 to $385.2bn, the company’s press service reported on March 20. Revenue in time charter equivalent amounted to around $1.4bn in the reporting period, up by 31.2% compared with the previous year. Total revenue rose by 22.6% to $1.9bn.
Sibur is going to increase production of polymers in 2023, Executive Board Member - Executive Director of the Russian petrochemical company Pavel Lyakhovich told TASS on March 23. Sibur increased petrochemicals and
204 RUSSIA Country Report Russia April 2023 www.intellinews.com