Page 113 - RusRPTJun20
P. 113
● Novatek
On April 30, Novatek held a conference call on its 1Q20 results. The key takeaways are as follows.
· Yamal LNG continues to operate at above nameplate capacity (utilisation was 122% in 1Q20). The fourth train of Yamal LNG is 79% complete and is to be commissioned by the end of 2020.
· LNG contractual terms are a commercial secret, so the price formula is not disclosed. However, the S-curve mechanism limits the volatility of LNG prices compared with oil prices. The price link to oil products has a lag that is close to six months. The Yamal LNG project remains profitable.
· Arctic LNG 2 is being put in place with no major delays seen, so the plant is to be launched in 2023. The launch of Obsky LNG might be delayed by one year until 2024.
· Novatek’s gas production might grow 2-3% YoY in 2020, liquids output is guided to stay flat YoY.
· Oil production is to be in compliance with the OPEC+ decision starting from May.
· 2020 capex might be reduced up to 20% (RUB 50bn) from the previous capex guidance of RUB 250bn. Most of the cut relates to future oil-related programmes (such as the Kharbeyskoye and East-Tarkosalinskoye oil program). Everything related to gas and LNG is to be kept.
· The company is already going to increase the dividend payout for 1H20 distribution
9.2.2 Automotive corporate news
Sales of Russia's largest car maker Avtovaz dropped three-fold month on month to 10,000 vehicles, the company said on March 11. AvtoVaz noted that its best-selling Lada models have maintained market leadership with a 20% share. As reported by bne IntelliNews, previously unit sales of its Lada brand decreased 3% year on year in March to 32,808 units and 3% y/y in 1Q20 to 79,600 units. AvtoVAZ/Renault/Nissan/Mitsubishi Group was the key player on the Russian market, with a 37% share in 1Q20. Car sales in Russia got a bump in March on front-loaded demand, but the market is expected to crash in April-May. The sales of new cars and light commercial vehicles (LCVs) in Russia in 2019 already declined by 2.3% to 1.76mn.
9.2.3 Aviation corporate news
Sheremetyevo International Airport Joint Stock Company (SVO JSC) reported revenue of RUB82,088mn for 2019, and increase of 41.6% over last year, and an operating profit of RUB27,083mn, an increase of 38.8% over
113 RUSSIA Country Report June 2020 www.intellinews.com
