Page 90 - RusRPTJuly18

a significant number of new ships which are capable of transporting LNG. However, the analysts do not expect the market to react on potentially higher shipment costs. Novatek's ambitious plans for LNG projects in the Arctic region, with total LNG capacity rising to 55-57mn tonnes in 2030, might require a significant number of new ships which are capable of transporting LNG. However, the analysts do not expect the market to react on potentially higher shipment costs.
Russian independent oil major Lukoil will build a petrochemical complex in Bulgaria , the company’s CEO Vagit Alekperov announced after the meeting with President Vladimir Putin and Bulgarian Prime Minister Boyko Borissov. "We will create a small petrochemical business to produce propylene and petroleum," Alekperov told RBC business portal on May 31, adding that the complex will be a modernisation of an existing plant. At the same time Lukoil does not intend to increase the number of gas stations in Bulgaria that currently stands at 221 stations. Lukoil's plant close to Bulgarian city off Bugras has a capacity of 9.5mn tonnes annually. The news are in line with Lukoil's new strategy presented at an Investor’s Day in London on March 23 , which along with organic extraction growth and progressive dividend policy, listed optimising refining to maximise free cash flow and development of petrochemical segment, as the four key goals of the company. In November Fitch Ratings noted that Lukoil's upstream production beats that of local peers Gazprom Neft and Novatek gas major, while Lukoil's Ebitda to annual output is higher than average, due to its larger and better diversified downstream.
Russian state oil pipeline operator Transneft reported its first-quarter IFRS results, which missed the expectations of the analysts on both the top and bottom line, but showed strong Ebitda margin of 48%, in line with the forecast. Notably, the company's board of directors recommended paying 50% of IFRS income for 2017, making a total final dividend of $945mn and being the first state energy major to comply with the Finance Ministry's demand for 50% payout . The federal budget income from state company dividends for 2018 has already been cut from RUB380bn to RUB251bn ($4bn), and most recently the head of the Audit Chamber Alexei Kudrin estimated that even the lower target could be missed by RUB43bn. VTB Capital on June 4 welcomed the dividend payout decision which "did not come as surprise", as it was announced earlier. VTB estimates that under 50% payout ratio Transneft's dividend yield could amount to 5.5% in 2018
9.2.2 Automotive corporate news
Sanctioned Russian billionaire Oleg Deripaska is considering selling his stake in Russian carmaker GAZ Group to relieve the company of the latest round of US Treasury sanctions, Bloomberg and Vedomosti d aily said on June 2 citing unnamed sources. GAZ is one of the businesses of Kremlin insider Deripaska that were hit the hardest by the latest round of USDT sanctions on April 6 , along with Basic Element, En+, Russian Machines, Eurosibenergo electric utility, Agroholding Kuban, B-Finance subsidiary, and one of world's largest aluminium producers Rusal. On May 22, however, the Treasury extended the deadline to comply with sanctions and cut ties with GAZ until October 23, as part of the lifeline that USDT threw Deripaska and Rusal. In a surprise move, the Treasury relaxed some of the sanctions and suggested they could be lifted completely if Deripaska sold his shares in the companies. Currently 65.56% in GAZ is held by Deripaska’s Russian Machines, with a
RUSSIA Country Report July 2018 www.intellinews.com