Russian oil and gas Sberbank banned report
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MAY 2018
RUSSIAN OIL AND GAS – TICKLING GIANTS
Contents
Report Summary ……………………………………………………………………………………………………………… 3
Gazprom: Performing As Designed …………………………………………………………………………………….. 4
And the villages dirty and charging high prices ………………………………………………………………… 5
The Ukraine pincer ………………………………………………………………………………………………………. 9
Soon to come: A $250 bln investment program …………………………………………………………….. 12
Quantifying a dream ………………………………………………………………………………………………….. 16
Lukoil: Will They Walk the Walk? ………………………………………………………………………………………. 19
Putting its cards on the table ……………………………………………………………………………………….. 21
The market might not believe the management ……………………………………………………………… 26
The market might fear a change in control …………………………………………………………………….. 27
The market might be starved of the marginal investor ……………………………………………………… 29
Valuations …………………………………………………………………………………………………………………….. 31
Financial Profiles ……………………………………………………………………………………………………………. 32
2
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Report Summary
We invert the common criticism of Gazprom and ask what needs to be assumed about the company to
conclude that it actually serves its function well. We discover that Gazprom’s decisions make perfect
sense if the company is assumed to be run for the benefit of its contractors, not for commercial profit.
The Power of Siberia, Nord Stream(cid:2)2 and Turkish Stream are all deeply value(cid:2)destructive projects that
will eat up almost half of Gazprom’s investments over the next five years. They are commonly
perceived as being foisted on the company by the government pursuing a geopolitical agenda. A more
important characteristic that they share, however, is the ability to employ a closely knit group of
suppliers in Russia, with little outside supervision. On the other hand, forgone or delayed projects –
Shtokman, Baltic LNG and Vladivostok LNG – would have been almost wholly constructed without the
help of Gazprom’s main current builders and with external oversight. This made them less attractive
from the standpoint of the interests that really set the company’s agenda.
Taking the contractors’ perspective will help gauge Gazprom’s future investment path. The rapid aging
of trunk infrastructure presents an excuse to undertake an indefinite investment drive to revamp the
network. This would play perfectly to the construction experience of Gazprom’s current slew of
suppliers. We see the emergence of Zagorsk Pipe Plant at the trough of the pipe market as a signal that
Russian large(cid:2)diameter pipe makers could soon get a major boost from an accelerated pipeline
replacement program. Unfortunately, such a project would bring no new revenues to Gazprom.
A possible reshuffling of the government later this month may present a rare chance to break this
pattern. We show that Gazprom, as a profit(cid:2)oriented entity, would be worth almost $200 bln, or
almost four times its current market valuation.
Lukoil has finally stated its capital allocation policy simply and clearly. The company will share the
vast majority of its free cash flow with shareholders, either through dividends or buybacks. It will
reinvest 80% of its capex in the Russian business, where it enjoys competencies (not the least of
which is extracting tax concessions). We believe that if the company follows through on its
promises, the market will have no cause to demand the current double(cid:2)digit free cash flow yields
from the shares. The stock price should catch up with the Brent price and surpass it.
In the report, however, we also examine what may prevent this from happening. First and foremost,
the market may simply take a wait(cid:2)and(cid:2)see attitude. The current management has failed to win
investors’ trust in the past, and has delivered a performance that ranks in the bottom half of the
sector. Investors may also fear a change in control, especially since Vagit Alekperov’s contingent
legacy may rob his heirs of the flexibility needed to deal with a potential pursuer. Finally, the
problem may simply lie in attracting the new class of investor. In particular, Lukoil is barely owned
by global energy(cid:2)oriented funds, which we ascribe to an unwillingness to deal with all the external
risk factors that come with owning Russian stocks. This is something the company could partially
address by simply showing up to meet with these investors.
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RUSSIAN OIL AND GAS – TICKLING GIANTS
Gazprom: Performing As Designed
“What if Gazprom were better run?” our predecessors at Troika Dialog, the progenitor of Sberbank
CIB, asked in the title of a report back in 2002. That report came out less than a year after
Gazprom’s current CEO, Alexei Miller, took the reins.
Since then, investors have continued posing this same question, with increasing resignation. The
potential government reshuffle, expected later this month, has again given scope for some
optimism. Some investors see Gazprom as the proverbial “low(cid:2)hanging fruit” for any domestic
reform effort. The eventual completion of the current slate of major pipeline projects appears to
open a window for a reform effort to succeed. The ultimate desire of investors, of course, is the
breakup of the company (which we will touch upon later), although they would gladly settle for
something much more modest, such as a cap on annual capital expenditures.
In this report, we propose an alternative point of view. What if we were to presume that Gazprom is
well(cid:2)run – that is, that it perfectly serves its function, from the standpoint of the parties who really
call the shots? And what if by these parties we meant not the government (the controlling
shareholder), and, of course, not the minority shareholders, who own almost 40% of the company,
but Gazprom’s main contractors?
Why them? Because power tends to be exercised by those who can coalesce their energies around a
unifying objective. What is often generalized as “the government” is actually a collection of diverse and
often contradictory interests. For instance, the Economics Ministry might prefer Gazprom to invest in
Russia’s neglected Far East regions, the Finance Ministry could like it to direct available funds toward the
dividend, while the Federal Antimonopoly Service may rather open up the export market to competing
Russian gas – and thus cause Gazprom to earn less money down the line. The Kremlin, meanwhile,
might prefer the company to focus on geopolitical projects, like expanding export infrastructure.
The contractors, however, face no such confusion of purpose. They are united in their desire to promote
any and all boondoggles, at least within the boundaries of Russia, where their activities will face less
scrutiny. Moreover, they are thought to be better connected to the ultimate node of power in Russia than
anyone who might possibly be interested in running Gazprom for shareholders. They therefore probably
exercise much more sway in Gazprom’s decision(cid:2)making than does “the government.”
Once you take this contractor(cid:2)oriented view, Gazprom’s choice of focus over the past 15 years –
including projects the company ultimately rejected – starts to make perfect sense. More
importantly, this viewpoint will help better inform a future outlook on the stock. In this section, we
will disclose what Gazprom might embark on after its current three major projects are concluded.
We believe this will include a major undertaking that the company has never aired in public, but
which could tie up its cash flows indefinitely.
4
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If, as Alekperov said at the March investor day, the market has always undervalued the company,
year in and year out – and its average FCF yield of almost 9% in the past decade would seem to
confirm that – then isn’t it about time that Lukoil’s management reflect upon its role in this? The
CEO is an example of the curious phenomenon among the leaders of Russian energy companies:
they tend to perform the function of a chief operating officer (COO, or what goes under the
equivalent title of “president” in some companies), rather than the function of chief executive
officer. In other words, they spend their time actually running the company, often delving into the
minutiae of production and logistics instead of delegating that responsibility and devoting their
energy to thinking how to best allocate capital. Below we divide the top executives into broad
categories of perceived primary focus, based purely on our subjective assessment after more than a
decade following their companies. As becomes apparent, those leaders who focus on capital
allocation tend to outperform those who primarily direct their time to operations.
How have Russian energy executives performed for shareholders?
Company
Head
Background
Primary focus*
Tatneft
Nail Maganov
Industry
Novatek
Leonid Mikhelson
Bashneft
Transneft
Bashneft
Gazprom Neft
Lukoil
Rosneft
Alexander Korsik
(former)
Nikolai Tokarev
Andrey Shishkin
(current)
Alexander Dyukov
Vagit Alekperov
Igor Sechin
Surgutneftegaz
Vladimir Bogdanov
Gazprom
Alexei Miller
Industry (energy
transportation)
Foreign relations,
finance
Political
appointee
Finance,
government
Political
appointee/Sibur
Industry,
government
Political
appointee
Industry
Political
appointee
Capital allocation/
operations
Operations/capital
allocation/government
relations
Capital allocation
Government
relations
Not clear
Government
relations
Operations
Operations/
government relations
Operations
Not clear
Annual
TSR**
RTS
TR**
Relative
performance
Note
16%
1%
15% Significant dividend increase.
20%
8%
12% Focus on risk management
in major projects.
7% (cid:2)3%
10% Preparations for London listing.
7% (cid:2)1%
8% Much of free float captured
29% 22%
7%
1%
18% 18%
(cid:2)1%
1%
16% 18%
11% 18%
by select investors.
7% Preferred shares rallied
from a low base.
6% Good operating performance
hampered by small free float.
0%
(cid:2)2%
(cid:2)2%
(cid:2)7%
* determining the primary focus involves a subjective analysis based on press reports and our own assessment
** total annual dollar shareholder return (including dividends) during the tenure, since the company’s IPO or since the start of this century if the IPO happened before 2001; RTS return based on the
identical period.; current period ended March 31, 2018
Note: Returns based on the most liquid share class performance: common shares for Tatneft; simple average of common and preferred shares for Surgutneftegaz; common shares for Bashneft
during Korsik’s tenure; preferred shares for Bashneft during Shishkin’s tenure.
Source: Companies, Bloomberg, Sberbank CIB Investment Research
It might take some time for Lukoil to generate investor confidence this time around. Specifically
outlining the rules or a schedule for share repurchases and subsequent share cancellation would
represent an important step forward, in our view.
The market might fear a change in control
Even if the company strengthens investor confidence in its new capital allocation program, the market
might continue demanding higher yield from the shares, fearing an eventual change of control.
Admittedly there is little that the management could do to address this point. However, Alekperov’s
decisions announced so far could lead to a worse outcome for minority shareholders, in our view.
Alekperov has reiterated several times now, most recently at the March investor day, that he has
bequeathed his shares in a trust to his family as part of a contingent legacy. Family members will be
unable to sell any part of the stake. Alekperov’s stake by then may well include Leonid Fedun’s 10%
share, too: Lukoil’s CEO has in the past stated that if Fedun ever decides to sell, he would be
required to sell to Alekperov.
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Valuations
Expected dividend yields for companies we cover
Expected free cash flow yields for companies we cover
2017
2018E
2019E
2020E
2017
2018E
2019E
2020E
Gazprom
Lukoil
Novatek
Gazprom Neft
Surgutneftegaz *
Tatneft
Rosneft
Transneft
Bashneft
neg
11%
5%
6%
24%
8%
neg
2%
8%
neg
12%
6%
10%
17%
7%
9%
7%
9%
neg
13%
5%
9%
18%
9%
9%
10%
14%
8%
13%
10%
13%
18%
10%
10%
11%
16%
* FCF of Surgutneftegaz is divided by market cap, because the enterprise value is impaired by a
large cash position. FCF is influenced by monetary gains and losses through tax payments
Note: Free cash flow yield is actual or expected free cash flow divided by enterprise value (EV).
Source: Sberbank CIB Investment Research
Gazprom
Lukoil
Rosneft
Novatek
Gazprom Neft *
Surgutneftegaz commons
Surgutneftegaz prefs **
Tatneft commons
Tatneft prefs
Bashneft commons ***
Bashneft prefs ***
Transneft prefs ****
6%
6%
3%
2%
5%
2%
5%
6%
9%
8%
10%
4%
6%
6%
5%
2%
10%
2%
11%
6%
9%
13%
16%
5%
6%
7%
8%
3%
11%
2%
9%
7%
9%
15%
19%
5%
6%
7%
8%
4%
14%
2%
9%
7%
9%
14%
18%
6%
* for Gazprom Neft assume gradual increase in payout to 50% by 2020 (from 28% for
2017).
** Surgutneftegaz preferred dividend for 2018 is based on the assumption of R60/USD
closing rate for the year.
*** For Bashneft, assume a 50% IFRS payout from 2017 onwards.
**** Transneft dividend assumes a 25% IFRS payout.
Note: For other assumptions used in calculating yields, please inquire with Sberbank CIB
Investment Research team.
Source: Sberbank CIB Investment Research
Comparative multiples(cid:2)based valuations
2018E
P/E
2019E
2020E
EV/EBITDA
2019E
2018E
2020E
Russia
Gazprom
Lukoil
Novatek
Gazprom Neft
Surgutneftegaz
Tatneft
Rosneft
Transneft
Bashneft
Emerging markets
Sinopec
CNOOC
PetroChina
Petrobras
ONGC
Developed markets
Royal Dutch Shell
BP
ChevronTexaco
ConocoPhillips
ENI
Exxon Mobil
Statoil
Total
2.9
4.5
12.7
3.4
3.3
8.1
11.1
5.2
3.5
11.2
10.2
25.2
10.5
7.8
14.9
16.4
19.7
22.5
16.9
16.2
16.3
12.8
2.6
4.6
8.8
3.7
3.8
8.0
6.5
4.7
3.1
10.8
10.0
23.3
8.7
7.4
13.8
15.7
19.1
21.5
16.2
16.1
15.9
12.4
2.6
4.7
6.9
3.6
3.9
8.0
6.0
4.2
3.2
10.8
9.5
23.3
7.3
–
12.7
13.9
17.4
20.9
15.0
15.0
14.3
11.7
2.6
2.8
9.9
3.4
neg
5.3
5.7
3.3
2.6
3.8
4.5
5.0
5.1
3.9
5.8
5.4
6.8
7.5
4.1
7.1
3.8
5.5
2.5
2.8
10.0
3.9
neg
5.2
5.1
3.1
2.4
3.6
4.4
4.7
4.5
3.7
5.6
5.1
6.5
7.0
3.9
6.8
3.5
5.1
2.4
2.8
8.8
3.8
neg
5.1
5.1
2.9
2.4
3.4
4.4
4.4
3.9
–
5.5
4.8
6.0
6.9
3.6
6.6
3.1
5.1
Note: Based on prices as of May 4, 2018. Bloomberg consensus estimates are used for foreign
companies and Sberbank CIB Investment Research estimates for Russian and FSU companies.
Source: Bloomberg, Sberbank CIB Investment Research
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Financial Profiles
Bashneft
Income statement (IFRS), $ mln
Revenues
Operating costs
EBIT
Depreciation
EBITDA
Net interest expenses
FX gain
Net other expenses
EBT
Tax
Income before minority interest
Minority interest
Net income
Source: Company, Sberbank CIB Investment Research
Balance sheet (IFRS), $ mln
Fixed assets and investments
Current assets
Stock and inventories
Accounts receivable
Cash and securities
Other current assets
Total assets
Current liabilities
Accounts payable
Short(cid:2)term debt
Other current liabilities
Long(cid:2)term liabilities
Long(cid:2)term debt
Other long(cid:2)term liabilities
Total liabilities
Minority interest
Equity
Share capital
Retained earnings
Total liabilities and equity
Source: Company, Sberbank CIB Investment Research
Cash flow statement (IFRS), $ mln
EBT
Provisions and non(cid:2)cash items
Taxes
Interest paid
Decrease in working capital
Increase in other assets
Operating cash flow
Capital expenditures
Other investments
Free cash flow
Increase in debt
Dividends
Additional share issues/(purchases)
Net cash flow
FX and monetary effects on cash
Change in cash position
Source: Company, Sberbank CIB Investment Research
2014
2015
16,765
14,670
2,095
618
2,714
(215)
6
(273)
1,613
(380)
1,233
1
1,235
10,061
8,504
1,557
546
2,103
(198)
(58)
(24)
1,277
(280)
997
(24)
973
2016
8,942
7,627
1,316
644
1,960
(164)
(87)
(95)
970
(191)
779
10
789
2017
2018E
2019E
2020E
11,509
9,821
1,689
846
2,535
(197)
1
1,565
3,059
(630)
2,429
20
2,449
14,057
11,553
2,504
794
3,298
(236)
–
(160)
2,108
(434)
1,674
14
1,688
14,436
11,723
2,712
870
3,582
(240)
–
(160)
2,312
(476)
1,836
15
1,852
15,072
12,500
2,572
961
3,533
(228)
–
(160)
2,185
(450)
1,735
15
1,749
2014
2015
2016
2017
2018E
2019E
2020E
6,902
2,406
469
967
939
32
9,308
1,977
992
508
477
3,712
2,783
928
5,689
139
3,481
1,483
1,997
9,308
2014
1,613
1,183
(387)
(313)
(70)
754
2,780
(1,230)
(1,060)
491
1,696
(981)
(511)
694
249
943
5,756
1,380
303
551
452
75
7,136
1,299
759
329
211
2,480
1,775
704
3,779
127
3,231
1,145
2,087
7,136
2015
1,277
884
(346)
(275)
153
(130)
1,563
(1,026)
60
597
(504)
(302)
–
(210)
3
(208)
7,581
2,050
482
1,001
124
443
9,631
1,804
1,380
399
26
3,465
2,405
1,060
5,269
47
4,314
1,375
2,939
9,631
2016
970
1,012
(241)
(100)
(694)
511
1,459
(1,261)
216
414
(301)
(437)
(48)
(371)
(58)
(429)
8,235
4,444
594
1,460
433
1,958
12,680
2,592
1,969
596
28
3,470
2,249
1,221
6,062
29
6,589
1,448
5,141
12,680
2017
3,059
(301)
(306)
9
(479)
(210)
1,771
(1,101)
(131)
539
90
(153)
(170)
305
(6)
299
8,578
5,803
558
2,091
1,196
1,958
14,381
2,787
2,058
700
28
3,838
2,644
1,194
6,625
15
7,741
1,448
6,293
14,381
2018E
2,108
1,058
(461)
(264)
(506)
–
1,936
(1,136)
1,667
2,466
500
(537)
–
2,429
–
2,429
8,914
6,528
588
2,543
1,440
1,958
15,442
2,886
2,157
700
28
3,809
2,644
1,165
6,695
(1)
8,748
1,448
7,300
15,442
2019E
2,396
1,176
(524)
(306)
(383)
–
2,360
(1,207)
–
1,153
–
(844)
–
309
–
309
8,939
7,485
626
3,109
1,792
1,958
16,424
3,086
2,358
700
28
3,781
2,644
1,137
6,867
(15)
9,572
1,448
8,124
16,424
2020E
2,271
1,267
(496)
(306)
(404)
–
2,332
(985)
–
1,346
–
(959)
–
387
–
387
32
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RUSSIAN OIL AND GAS – TICKLING GIANTS
MAY 2018
Gazprom
Income statement (IFRS), $ mln
Revenues
Operating costs
EBIT
Depreciation
EBITDA
Net interest expenses
FX gain
Net other expenses
EBT
Tax
Income before minority interest
Minority interest
Net income
Source: Company, Sberbank CIB Investment Research
Balance sheet (IFRS), $ mln
Fixed assets and investments
Current assets
Stock and inventories
Accounts receivable
Cash and securities
Other current assets
Total assets
Current liabilities
Accounts payable
Short(cid:2)term debt
Long(cid:2)term liabilities
Long(cid:2)term debt
Deferred profit tax liability
Other long(cid:2)term liabilities
Total liabilities
Minority interest
Equity
Share capital
Retained earnings
Total liabilities and equity
Source: Company, Sberbank CIB Investment Research
Cash flow statement (IFRS), $ mln
EBITDA
Provisions and non(cid:2)cash items
Taxes
Decrease in working capital
Increase in other assets
Operating cash flow
Capex
Other investments
Free cash flow
Increase in debt
Interest paid
Dividends
Additional share issues/(purchases)
Net cash flow
FX and monetary effects on cash
Other sources/(uses) of funds
Change in cash position
Source: Company, Sberbank CIB Investment Research
2014
2015
2016
2017
2018E
2019E
2020E
145,880
111,233
34,647
12,385
47,033
515
(24,492)
1,464
12,134
(4,528)
7,606
(88)
7,518
98,994
78,948
20,046
8,465
28,511
757
(6,923)
1,899
15,779
(2,135)
13,644
(311)
13,333
91,320
80,681
10,638
8,573
19,211
326
6,707
1,276
18,948
(4,254)
14,694
(686)
14,008
111,890
96,977
14,913
10,515
25,428
520
(245)
2,189
17,377
(4,290)
13,086
(901)
12,186
126,529
102,925
23,604
11,779
35,383
(182)
(2,540)
3,027
23,909
(5,903)
18,006
(865)
17,140
130,756
106,386
24,370
13,057
37,427
(390)
–
3,202
27,183
(6,711)
20,471
(984)
19,487
130,947
106,417
24,530
14,493
39,023
(563)
–
3,338
27,306
(6,742)
20,564
(988)
19,576
2014
2015
2016
2017
2018E
2019E
2020E
208,259
61,522
11,943
18,592
18,454
12,533
269,781
32,990
24,728
8,262
56,907
39,533
10,560
6,814
89,897
5,394
174,491
5,780
168,710
269,781
179,169
54,797
11,036
15,288
18,648
9,825
233,966
29,152
20,284
8,869
55,057
38,361
8,485
8,211
84,210
4,460
145,296
4,462
140,834
233,966
225,607
53,322
11,725
17,887
14,784
8,926
278,928
31,683
24,313
7,371
58,613
39,279
11,351
7,983
90,296
5,726
182,906
5,361
177,545
278,928
256,414
60,230
13,408
19,492
15,087
12,243
316,644
44,957
29,769
15,188
63,086
41,523
12,143
9,421
108,043
6,708
201,893
5,646
196,247
316,644
277,164
62,388
14,369
22,042
13,734
12,243
339,552
49,053
31,617
16,427
67,064
45,283
12,361
9,421
116,117
7,574
215,861
5,646
210,216
339,552
300,348
62,604
14,717
22,778
12,865
12,243
362,952
51,145
32,381
17,667
71,072
49,043
12,608
9,421
122,218
8,557
232,177
5,646
226,531
362,952
310,935
72,482
14,441
22,811
22,986
12,243
383,417
51,932
31,839
18,907
75,081
52,803
12,857
9,421
127,013
9,546
246,858
5,646
241,213
383,417
2014
2015
2016
2017
2018E
2019E
2020E
47,033
8,674
(5,512)
(4,613)
4,308
49,890
(33,164)
(4,401)
16,726
(1,022)
(818)
(4,922)
(0)
5,562
3,012
(360)
8,213
28,511
3,596
(1,710)
(2,310)
4,871
32,958
(26,740)
(418)
6,218
1,107
(663)
(2,732)
–
3,512
1,328
1
4,841
19,211
2,505
(1,431)
361
2,366
23,012
(20,326)
(1,079)
2,686
(1,551)
(737)
(2,886)
(2,036)
(5,602)
(1,840)
(29)
(7,471)
25,428
(408)
(3,919)
3,197
(3,894)
20,404
(24,101)
612
(3,697)
6,481
(586)
(3,257)
–
(447)
70
(6)
(382)
35,383
(2,540)
(5,685)
(1,663)
1,008
26,503
(31,317)
1,904
(4,814)
5,000
(271)
(3,172)
–
(1,353)
–
–
(1,353)
37,427
–
(6,464)
(320)
89
30,732
(34,854)
1,721
(4,122)
5,000
(295)
(3,172)
–
(868)
–
–
(868)
39,023
–
(6,493)
(300)
(1,633)
30,597
(23,556)
1,571
7,041
5,000
(319)
(3,172)
–
10,121
–
–
10,121
SBERBANK CIB INVESTMENT RESEARCH
33
This document is being provided by anastasia_nutrikhina@sberbank-cib.ru for the exclusive use of yvolov@APRIL-CAPITAL.RU
MAY 2018
RUSSIAN OIL AND GAS – TICKLING GIANTS
Gazprom Neft
Income statement (IFRS), $ mln
Revenues
Operating costs
EBIT
Depreciation
EBITDA
Net interest expenses
FX gain
Net other expenses
EBT
Tax
Income before minority interest
Minority interest
Net income
Source: Company, Sberbank CIB Investment Research
Balance sheet (IFRS), $ mln
Fixed assets and investments
Current assets
Stock and inventories
Accounts receivable
Cash and securities
Other current assets
Total assets
Current liabilities
Accounts payable
Short(cid:2)term debt
Other current liabilities
Long(cid:2)term liabilities
Long(cid:2)term debt
Other long(cid:2)term liabilities
Total liabilities
Minority interest
Equity
Share capital
Retained earnings
Total liabilities and equity
Source: Company, Sberbank CIB Investment Research
Cash flow statement (IFRS), $ mln
EBITDA
Taxes
Decrease in working capital
Increase in other assets
Operating cash flow
Capex
Other investments
Free cash flow
Increase in debt
Interest paid
Dividends
Net cash flow
FX and monetary effects on cash
Change in cash position
Source: Company, Sberbank CIB Investment Research
2014
2015
2016
2017
2018E
2019E
2020E
44,414
38,601
5,814
2,257
8,070
(208)
(1,191)
(96)
4,319
(626)
3,693
(122)
3,571
27,269
23,592
3,676
1,615
5,291
(309)
(1,031)
264
2,600
(509)
2,092
(108)
1,984
25,566
21,972
3,593
1,962
5,556
(345)
433
245
3,927
(758)
3,169
(149)
3,020
34,345
29,160
5,185
2,417
7,602
(258)
(8)
649
5,568
(951)
4,617
(281)
4,336
42,538
34,886
7,652
2,599
10,251
(217)
–
1,156
8,590
(1,467)
7,123
(434)
6,689
43,562
37,326
6,237
2,829
9,066
133
–
1,540
7,909
(1,351)
6,558
(400)
6,159
44,850
38,625
6,225
3,034
9,259
387
–
1,903
8,515
(1,703)
6,812
(430)
6,382
2014
2015
2016
2017
2018E
2019E
2020E
28,917
8,371
1,825
1,831
945
3,770
37,287
4,457
2,313
1,086
1,057
12,748
8,929
3,820
17,205
1,138
18,944
892
18,052
37,287
2014
8,070
(843)
338
(407)
7,157
(6,977)
(2,485)
(2,305)
1,871
(393)
(1,148)
(2,226)
703
(1,522)
27,095
7,008
1,405
1,307
1,567
2,729
34,102
4,789
2,126
2,021
642
12,183
9,204
2,979
16,972
1,254
15,876
610
15,266
34,102
2015
5,291
(719)
317
(10)
4,880
(5,693)
379
(433)
1,881
(552)
(563)
286
100
385
35,486
6,534
1,660
1,905
554
2,414
42,020
4,772
2,723
1,322
727
13,439
9,829
3,610
18,211
1,385
22,424
843
21,580
42,020
2016
5,556
(693)
(54)
254
5,061
(5,807)
852
107
(847)
(511)
(40)
(1,321)
(143)
(1,463)
43,531
7,337
2,054
1,775
1,573
1,934
50,868
8,322
4,927
2,287
1,107
13,742
9,525
4,217
22,064
1,838
26,966
1,083
25,884
50,868
46,934
10,436
2,204
2,199
4,099
1,934
57,370
8,921
5,526
2,287
1,107
13,742
9,525
4,217
22,662
2,272
32,436
1,083
31,353
57,370
2017
2018E
7,602
(886)
724
185
7,626
(6,124)
757
2,258
60
(434)
(855)
967
(21)
945
10,251
(1,307)
26
0
8,970
(6,002)
516
3,484
–
(461)
(1,219)
1,804
–
1,804
50,041
12,390
2,269
2,252
5,935
1,934
62,431
9,304
5,909
2,287
1,107
13,742
9,525
4,217
23,046
2,672
36,714
1,083
35,631
62,431
2019E
9,066
(1,065)
265
(0)
8,266
(5,936)
969
3,298
–
(461)
(1,881)
957
–
957
51,789
15,928
2,318
2,318
9,357
1,934
67,716
9,509
6,114
2,287
1,107
13,742
9,525
4,217
23,251
3,102
41,364
1,083
40,281
67,716
2020E
9,259
(1,245)
89
0
8,103
(4,781)
1,389
4,711
–
(461)
(1,732)
2,518
–
2,518
34
SBERBANK CIB INVESTMENT RESEARCH
This document is being provided by anastasia_nutrikhina@sberbank-cib.ru for the exclusive use of yvolov@APRIL-CAPITAL.RU
RUSSIAN OIL AND GAS – TICKLING GIANTS
MAY 2018
Lukoil
Income statement (IFRS), $ mln
Revenues
Operating costs
EBIT
Depreciation
Impairment
EBITDA
Net interest expenses
FX gain
Net other expenses
EBT
Tax
Income before minority interest
Minority interest
Net income
Source: Company, Sberbank CIB Investment Research
Balance sheet (IFRS), $ mln
Fixed assets and investments
Current assets
Stock and inventories
Accounts receivable
Cash and securities
Other current assets
Total assets
Current liabilities
Accounts payable
Short(cid:2)term debt
Deferred taxes and provisions
Long(cid:2)term liabilities
Long(cid:2)term debt
Other long(cid:2)term liabilities
Total liabilities
Minority interest
Equity
Share capital
Retained earnings
Total liabilities and equity
Source: Company, Sberbank CIB Investment Research
Cash flow statement (IFRS), $ mln
EBITDA
Provisions and non(cid:2)cash items
Taxes
Interest paid
Decrease in working capital
Increase in other assets
Operating cash flow
Capex
Other investments
Free cash flow
Increase in debt
Dividends
Additional share issues/(purchases)
Net cash flow
FX and monetary effects on cash
Change in cash position
Source: Company, Sberbank CIB Investment Research
2014
2015
2016
2017
2018E
2019E
2020E
144,167
137,041
7,126
8,816
1,753
17,695
(362)
(355)
363
6,772
(2,058)
4,714
32
4,746
94,816
87,333
7,483
5,943
–
13,426
(491)
1,637
(2,386)
6,243
(1,550)
4,693
(27)
4,667
78,652
72,379
6,273
4,661
–
10,933
(488)
(1,642)
(36)
4,107
(981)
3,126
(13)
3,113
101,752
93,080
8,672
5,574
–
14,246
(209)
(327)
870
9,006
(1,781)
7,225
(28)
7,197
121,761
108,974
12,788
5,575
–
18,363
(280)
74
351
12,933
(2,587)
10,346
(57)
10,289
122,126
109,552
12,574
5,919
–
18,494
(198)
–
351
12,727
(2,545)
10,182
(56)
10,125
122,781
110,560
12,221
6,330
–
18,551
(110)
–
345
12,456
(2,491)
9,965
(55)
9,909
2014
2015
2016
2017
2018E
2019E
2020E
89,041
22,759
6,154
11,387
3,004
2,214
111,800
14,212
8,538
2,168
3,506
16,236
11,361
4,875
30,448
222
81,130
4,539
76,591
111,800
52,234
16,652
4,668
6,044
3,530
2,411
68,886
9,538
6,576
830
2,132
15,011
10,966
4,046
24,549
122
44,214
1,791
42,423
68,886
61,972
20,701
6,665
5,950
4,309
3,777
82,673
13,695
10,637
963
2,095
15,766
10,554
5,212
29,461
112
53,100
2,154
50,946
82,673
68,022
22,710
6,913
7,262
5,736
2,800
90,733
16,647
11,779
2,235
2,633
13,489
8,466
5,023
30,136
129
60,468
2,271
58,197
90,733
72,035
26,546
7,114
7,673
9,029
2,731
98,582
16,956
12,413
1,910
2,633
13,537
8,466
5,071
30,493
129
67,959
2,271
65,689
98,582
75,661
30,353
7,372
7,696
12,555
2,731
106,015
17,341
12,797
1,910
2,633
13,537
8,466
5,071
30,878
129
75,008
2,271
72,737
106,015
78,842
34,051
7,609
7,737
15,975
2,731
112,893
17,694
13,151
1,910
2,633
13,537
8,466
5,071
31,231
129
81,533
2,271
79,262
112,893
2014
2015
2016
2017
2018E
2019E
2020E
17,695
(1,761)
(2,300)
(565)
(370)
2,869
15,568
(14,545)
(98)
925
2,524
(1,357)
(107)
1,985
(693)
1,292
13,426
1,519
(1,509)
(675)
2,013
(1,037)
13,736
(9,909)
1,230
5,057
(1,507)
(1,778)
(710)
1,064
(538)
526
10,933
1,386
(1,069)
(742)
1,865
(1,044)
11,330
(7,456)
(22)
3,853
(446)
(1,876)
(825)
707
72
779
14,246
1,357
(1,514)
(666)
(745)
336
13,013
(8,770)
1,368
5,611
(1,003)
(2,359)
(880)
1,369
58
1,427
18,363
436
(2,539)
(487)
22
111
15,907
(9,817)
–
6,090
–
(2,797)
–
3,293
–
3,293
18,494
456
(2,545)
(487)
103
351
16,371
(9,768)
–
6,603
–
(3,077)
–
3,526
–
3,526
18,551
557
(2,491)
(487)
75
345
16,550
(9,745)
–
6,804
–
(3,385)
–
3,420
–
3,420
SBERBANK CIB INVESTMENT RESEARCH
35
This document is being provided by anastasia_nutrikhina@sberbank-cib.ru for the exclusive use of yvolov@APRIL-CAPITAL.RU
MAY 2018
RUSSIAN OIL AND GAS – TICKLING GIANTS
Novatek
Income statement (IFRS), $ mln
Revenues
Operating costs
EBIT
Depreciation
EBITDA
Net interest expenses
FX gain
Net other expenses
EBT
Tax
Income before minority interest
Minority interest
Net income
2014
9,388
6,051
3,337
450
3,788
(21)
(599)
(1,071)
1,721
(460)
1,261
9
1,271
2015
7,791
5,499
2,292
327
2,619
63
(147)
(607)
1,613
(317)
1,295
7
1,302
2016
8,053
5,780
2,272
521
2,793
108
(402)
1,532
4,491
(620)
3,871
(109)
3,761
2017
9,995
7,189
2,806
592
3,398
140
238
245
3,429
(590)
2,839
(173)
2,666
2018E
2019E
2020E
10,808
7,526
3,282
652
3,934
138
(98)
393
3,714
(615)
3,099
(188)
2,911
10,822
7,575
3,247
652
3,899
135
–
1,660
5,043
(627)
4,416
(185)
4,231
11,830
8,074
3,756
652
4,407
135
–
2,339
6,230
(721)
5,510
(159)
5,351
Note: Novatek’s income and cash flow statements now incorporate its share in Yamal LNG.
Source: Company, Sberbank CIB Investment Research
Balance sheet (IFRS), $ mln
Fixed assets and investments
Current assets
Stock and inventories
Accounts receivable
Cash and securities
Other current assets
Total assets
Current liabilities
Accounts payable
Short(cid:2)term debt
Deferred taxes and provisions
Long(cid:2)term liabilities
Long(cid:2)term debt
Other long(cid:2)term liabilities
Total liabilities
Minority interest
Equity
Share capital
Retained earnings
Total liabilities and equity
Source: Company, Sberbank CIB Investment Research
Cash flow statement (IFRS), $ mln
EBITDA
Taxes
Decrease in working capital
Operating cash flow
Capex
Other investments
Free cash flow
Increase/(decrease) in debt
Dividends
Additional share issues/(purchases)
Net cash flow
FX and monetary effects on cash
Other sources/(uses) of funds
Change in cash position
2014
2015
2016
2017
2018E
2019E
2020E
10,177
2,250
125
615
734
776
12,427
1,443
544
728
172
4,103
3,639
464
5,546
42
6,839
470
6,369
12,427
2014
3,788
(694)
66
3,160
(1,608)
377
1,930
13
(751)
(72)
1,120
376
(81)
1,414
10,312
1,763
113
515
400
734
12,075
2,328
666
1,463
199
3,872
3,458
413
6,200
29
5,846
353
5,494
12,075
2015
2,619
(270)
(84)
2,266
(826)
(1,748)
(308)
919
(582)
(13)
16
22
(142)
(103)
13,701
2,189
149
686
796
558
15,890
1,794
634
914
245
3,253
2,659
594
5,047
154
10,689
408
10,280
15,890
2016
2,793
(423)
217
2,587
(514)
721
2,794
(1,533)
(622)
(14)
625
(147)
(302)
176
15,464
2,664
192
773
1,145
554
18,128
1,458
851
248
332
3,204
2,456
748
4,661
309
13,157
405
12,752
18,128
2017
3,398
(559)
88
2,927
(512)
(385)
2,030
(913)
(721)
(25)
371
(11)
(72)
288
16,317
4,317
229
835
2,698
554
20,634
1,538
949
248
341
3,286
2,554
733
4,825
497
15,311
405
14,906
20,634
2018E
3,934
(631)
7
3,310
(1,065)
124
2,369
–
(757)
–
1,613
–
(60)
1,553
18,736
5,408
231
837
3,786
554
24,143
1,556
969
248
338
3,265
2,554
711
4,821
683
18,639
405
18,234
24,143
2019E
3,899
(648)
15
3,266
(1,869)
458
1,856
–
(903)
–
953
–
135
1,088
20,073
8,322
236
914
6,617
554
28,395
1,594
981
248
364
3,239
2,554
685
4,833
841
22,721
405
22,316
28,395
2020E
4,407
(747)
(45)
3,615
(911)
1,261
3,965
–
(1,269)
–
2,696
–
135
2,831
Note: Novatek’s income and cash flow statements now incorporate its share in Yamal LNG.
Source: Company, Sberbank CIB Investment Research
36
SBERBANK CIB INVESTMENT RESEARCH
This document is being provided by anastasia_nutrikhina@sberbank-cib.ru for the exclusive use of yvolov@APRIL-CAPITAL.RU
RUSSIAN OIL AND GAS – TICKLING GIANTS
MAY 2018
Rosneft
Income statement (IFRS), $ mln
Revenues
Operating costs
EBIT
Depreciation
EBITDA
EBITDA (adjusted)
Net interest expenses
FX gain
Net other expenses
EBT
Tax
Income before minority interest
Minority interest
Net income
2014
2015
2016
2017E
2018E
2019E
2020E
145,887
129,287
16,600
12,099
28,699
28,699
(4,586)
267
196
12,478
(3,168)
9,310
(72)
9,238
84,808
73,194
11,614
7,458
19,072
20,493
(3,439)
1,353
(1,771)
7,757
(1,735)
6,022
(16)
6,006
74,886
65,270
9,616
7,242
16,858
18,858
(1,510)
(1,033)
(2,185)
4,888
(1,805)
3,083
(315)
2,768
102,060
92,405
9,655
10,047
19,702
23,011
(2,024)
75
(927)
6,779
(1,678)
5,101
(1,285)
3,816
126,063
109,021
17,042
10,538
27,580
30,260
(2,508)
–
(1,882)
12,653
(2,531)
10,122
(4,246)
5,877
131,260
111,721
19,539
11,075
30,614
31,924
(1,921)
–
975
18,593
(3,719)
14,875
(4,868)
10,007
134,642
115,272
19,371
11,533
30,904
32,214
(1,240)
–
1,345
19,475
(3,895)
15,580
(4,826)
10,754
Note: Adjusted EBITDA includes the portion of revenues from supplies under prepayments not reflected in the income statement.
Source: Company, Sberbank CIB Investment Research
Balance sheet (IFRS), $ mln
Fixed assets and investments
Current assets
Stock and inventories
Accounts receivable
Cash and securities
Other current assets
Total assets
Current liabilities
Accounts payable
Short(cid:2)term debt
Deferred taxes and provisions
Other current liabilities
Long(cid:2)term liabilities
Long(cid:2)term debt
Other long(cid:2)term liabilities
Total liabilities
Minority interest
Equity
Share capital
Retained earnings
Total liabilities and equity
Source: Company, Sberbank CIB Investment Research
Cash flow statement (IFRS), $ mln
EBITDA
Provisions and non(cid:2)cash items
Taxes
Interest paid
Decrease in working capital
Operating cash flow
Capex
Other investments
Free cash flow
Increase in debt
Dividends
Additional share issues/(purchases)
Net cash flow
FX and monetary effects on cash
Change in cash position
Source: Company, Sberbank CIB Investment Research
2014
2015
2016
2017
2018E
2019E
2020E
117,405
37,879
4,142
9,847
3,857
20,033
155,283
36,101
8,781
23,037
3,573
711
67,972
54,694
13,278
104,073
160
51,050
8,781
42,269
155,283
97,197
35,043
3,005
5,035
7,697
19,305
132,240
25,795
6,531
15,916
2,003
1,345
66,257
55,816
10,441
92,052
590
39,598
6,970
32,628
132,240
143,924
37,918
4,666
7,996
13,057
12,200
181,842
45,716
9,611
31,752
3,759
594
74,699
57,702
16,997
120,415
6,875
54,553
9,958
44,595
181,842
172,482
39,792
5,625
14,635
5,816
13,715
212,274
66,597
16,858
43,281
5,503
955
73,055
53,906
19,149
139,652
9,792
62,830
10,903
51,927
212,274
176,633
46,177
6,636
13,470
12,355
13,715
222,809
69,565
18,401
43,281
6,928
955
72,351
53,906
18,445
141,917
14,037
66,855
10,903
55,952
222,809
180,770
54,481
6,801
14,025
19,940
13,715
235,252
71,106
19,668
43,281
7,202
955
71,317
53,906
17,411
142,423
18,905
73,924
10,903
63,021
235,252
183,799
62,515
7,017
14,386
27,397
13,715
246,314
72,675
20,912
43,281
7,526
955
70,234
53,906
16,328
142,909
23,731
79,675
10,903
68,772
246,314
2014
2015
2016
2017
2018E
2019E
2020E
28,699
8,742
(5,074)
(2,255)
13,183
43,295
(17,966)
(13,631)
25,329
(9,423)
(3,748)
(2,531)
(4,005)
1,724
(2,281)
19,072
3,023
(1,980)
(2,466)
17,929
36,999
(10,085)
(2,889)
26,914
(14,735)
(1,377)
(1,521)
6,392
791
7,183
16,858
1,161
(554)
(2,642)
(5,475)
11,348
(11,086)
(4,577)
262
10,176
(1,935)
2,712
6,639
(1,705)
4,934
19,702
4,086
(2,055)
(3,412)
(12,550)
9,080
(15,842)
(4,028)
(6,762)
11,261
(1,770)
(3,013)
(4,312)
(401)
(4,714)
27,580
928
(3,234)
(3,553)
3,122
27,523
(13,613)
713
13,910
–
(1,851)
(3,553)
9,219
–
9,219
30,614
3,948
(4,753)
(3,553)
821
28,388
(13,948)
946
14,440
–
(2,938)
(3,553)
8,895
–
8,895
30,904
4,629
(4,978)
(3,553)
991
29,303
(13,342)
1,362
15,961
–
(5,003)
(3,553)
8,766
–
8,766
37
SBERBANK CIB INVESTMENT RESEARCH
This document is being provided by anastasia_nutrikhina@sberbank-cib.ru for the exclusive use of yvolov@APRIL-CAPITAL.RU
MAY 2018
RUSSIAN OIL AND GAS – TICKLING GIANTS
Surgutneftegaz
Income statement (IFRS), $ mln
Revenues
Operating costs
EBIT
Depreciation
EBITDA
Net interest expenses
Monetary gain/(loss)
Net other expenses
EBT
Tax
Income before minority interest
Net income
Source: Company, Sberbank CIB Investment Research
Balance sheet (IFRS), $ mln
Fixed assets and investments
Current assets
Stock and inventories
Accounts receivable
Cash and securities
Other current assets
Total assets
Current liabilities
Accounts payable
Deferred taxes and provisions
Other current liabilities
Long(cid:2)term liabilities
Other long(cid:2)term liabilities
Total liabilities
Minority interest
Equity
Share capital
Retained earnings
Total liabilities and equity
Source: Company, Sberbank CIB Investment Research
Cash flow statement (IFRS), $ mln
EBITDA
Provisions and non(cid:2)cash items
Taxes
Interest received
Decrease in working capital
Operating cash flow
Capex
Other investments
Free cash flow
Dividends
Additional share issues/(purchases)
Net cash flow
FX and monetary effects on cash
Change in cash position
Source: Company, Sberbank CIB Investment Research
2014
35,711
31,324
4,387
1,920
6,307
1,613
20,204
(42)
26,162
(4,529)
21,633
21,633
2015
20,946
16,896
4,050
1,150
5,200
1,503
9,067
6
14,625
(2,494)
12,131
12,131
2016
18,356
14,458
3,899
1,157
5,056
1,615
(6,440)
(33)
(959)
135
(825)
(826)
2017
2018E
2019E
2020E
23,510
18,817
4,693
1,142
5,836
1,669
(2,041)
(75)
4,246
(891)
3,355
3,354
28,324
22,226
6,099
1,158
7,256
759
892
–
7,654
(1,531)
6,123
6,122
28,364
22,516
5,849
1,167
7,016
808
–
–
6,657
(1,331)
5,326
5,324
28,353
22,687
5,666
1,174
6,840
860
–
–
6,526
(1,305)
5,221
5,219
2014
2015
2016
2017
2018E
2019E
2020E
20,665
38,101
1,163
1,074
34,521
1,343
58,766
3,161
766
1,298
1,097
3,896
3,896
7,058
3
51,706
3,777
47,929
58,766
2014
6,307
663
(3,101)
1,944
(0)
5,813
(4,102)
(2,390)
1,710
(935)
306
(1,309)
255
(1,054)
17,704
37,889
1,041
817
35,314
717
55,593
3,034
710
914
1,410
3,403
3,403
6,437
3
49,153
2,915
46,238
55,593
2015
5,200
163
(2,456)
1,889
115
4,909
(2,791)
(136)
2,119
(1,325)
440
1,097
24
1,121
22,945
41,707
1,403
1,431
37,739
1,133
64,652
3,502
806
828
1,868
4,349
4,349
7,850
4
56,798
3,503
53,295
64,652
2016
5,056
65
(795)
966
(134)
5,157
(2,715)
(1,278)
2,442
(1,163)
297
298
(50)
248
25,737
47,868
1,411
1,585
44,062
810
73,605
5,621
828
1,145
3,648
5,256
5,256
10,877
5
62,724
3,689
59,035
73,605
2017
5,836
178
27
1,382
296
7,718
(2,760)
(3,625)
4,958
(449)
1,208
2,093
5
2,097
27,200
51,939
1,384
1,909
47,836
810
79,139
5,565
441
1,477
3,648
5,256
5,256
10,821
7
68,311
3,689
64,622
79,139
2018E
7,256
19
(1,531)
759
(352)
6,151
(2,640)
–
3,511
(534)
–
2,977
–
2,977
28,728
54,963
1,411
1,912
50,830
810
83,690
5,583
448
1,487
3,648
5,256
5,256
10,838
9
72,844
3,689
69,155
83,690
2019E
7,016
20
(1,331)
808
(13)
6,500
(2,714)
–
3,785
(792)
–
2,994
–
2,994
30,324
57,859
1,436
1,911
53,702
810
88,183
5,590
455
1,487
3,648
5,256
5,256
10,845
10
77,328
3,689
73,639
88,183
2020E
6,840
21
(1,305)
860
(17)
6,399
(2,792)
–
3,607
(735)
–
2,872
–
2,872
38
SBERBANK CIB INVESTMENT RESEARCH
This document is being provided by anastasia_nutrikhina@sberbank-cib.ru for the exclusive use of yvolov@APRIL-CAPITAL.RU
RUSSIAN OIL AND GAS – TICKLING GIANTS
MAY 2018
Tatneft
Income statement (IFRS), $ mln
Revenues
Operating costs
EBIT
Depreciation
EBITDA
Net interest expenses
FX gain
Net other expenses
EBT
Tax
Income before minority interest
Minority interest
Net income
Source: Company, Sberbank CIB Investment Research
Balance sheet (IFRS), $ mln
Fixed assets and investments
Current assets
Stock and inventories
Accounts receivable
Cash and securities
Other current assets
Total assets
Current liabilities
Accounts payable
Short(cid:2)term debt
Other current liabilities
Long(cid:2)term liabilities
Long(cid:2)term debt
Other long(cid:2)term liabilities
Total liabilities
Minority interest
Equity
Share capital
Retained earnings
Total liabilities and equity
Source: Company, Sberbank CIB Investment Research
Cash flow statement (IFRS), $ mln
EBITDA
Provisions and non(cid:2)cash items
Taxes
Decrease in working capital
Increase in other assets
Operating cash flow
Capex
Other investments
Free cash flow
Increase in debt
Interest paid
Dividends
Additional share issues/(purchases)
Net cash flow
FX and monetary effects on cash
Change in cash position
Source: Company, Sberbank CIB Investment Research
2014
2015
2016
2017
2018E
2019E
2020E
17,155
14,210
2,945
553
3,546
35
313
21
3,314
(700)
2,614
(146)
2,468
10,830
8,653
2,178
410
2,679
59
34
19
2,289
(530)
1,760
(113)
1,647
10,041
7,842
2,199
324
2,561
23
(50)
(19)
2,137
(527)
1,610
20
1,630
13,242
10,481
2,762
427
3,451
59
(27)
23
2,802
(679)
2,123
(13)
2,110
16,123
12,408
3,715
470
4,185
57
–
(0)
3,772
(914)
2,857
(17)
2,840
16,698
12,916
3,783
492
4,275
59
–
(0)
3,841
(931)
2,910
(18)
2,892
16,738
12,955
3,783
510
4,293
71
–
(0)
3,854
(934)
2,920
(18)
2,902
2014
2015
2016
2017
2018E
2019E
2020E
9,818
3,210
577
819
768
1,047
13,028
1,217
932
282
3
1,462
229
1,232
2,679
467
9,882
1,764
8,118
13,028
2014
3,546
592
(700)
200
(200)
3,439
(1,622)
(241)
1,577
(875)
35
(484)
(46)
207
41
248
8,499
2,459
440
825
342
852
10,959
946
846
72
27
990
177
813
1,935
403
8,621
1,330
7,291
10,959
2015
2,679
138
(530)
(132)
67
2,222
(1,517)
(439)
266
(210)
59
(392)
(32)
(309)
18
(291)
12,564
5,482
549
1,053
1,271
2,608
18,046
4,721
1,142
318
3,261
1,638
574
1,063
6,359
89
11,598
1,599
9,999
18,046
2016
2,561
54
(527)
46
79
2,212
(1,428)
720
784
(121)
23
(369)
(107)
930
(22)
908
14,272
4,955
683
1,069
743
2,460
19,227
5,318
1,308
693
3,316
1,431
120
1,311
6,749
119
12,359
1,670
10,688
19,227
2017
3,451
148
(679)
269
(1)
3,189
(1,457)
(469)
1,732
(60)
59
(1,860)
0
(598)
(5)
(603)
15,449
5,363
795
1,288
820
2,460
20,811
5,515
1,466
733
3,316
1,509
74
1,436
7,025
137
13,650
1,670
11,980
20,811
2018E
4,185
123
(914)
(178)
–
3,215
(1,647)
–
1,569
–
57
(1,548)
–
77
–
77
16,374
6,160
849
1,349
1,503
2,460
22,534
5,621
1,572
733
3,316
1,636
74
1,562
7,257
154
15,122
1,670
13,452
22,534
2019E
4,275
127
(931)
(9)
–
3,462
(1,417)
–
2,044
–
59
(1,420)
–
683
–
683
17,327
6,881
823
1,352
2,247
2,460
24,207
5,694
1,645
733
3,316
1,763
74
1,690
7,457
172
16,578
1,670
14,908
24,207
2020E
4,293
127
(934)
96
–
3,582
(1,463)
–
2,119
–
71
(1,446)
–
744
–
744
SBERBANK CIB INVESTMENT RESEARCH
39
This document is being provided by anastasia_nutrikhina@sberbank-cib.ru for the exclusive use of yvolov@APRIL-CAPITAL.RU
MAY 2018
RUSSIAN OIL AND GAS – TICKLING GIANTS
Transneft
Income statement (IFRS), $ mln
Revenues
Operating costs
EBIT
Depreciation
EBITDA
Net interest expenses
FX gain
Net other expenses
EBT
Tax
Income before minority interest
Minority interest
Net income
Source: Company, Sberbank CIB Investment Research
Balance sheet (IFRS), $ mln
Fixed assets and investments
Current assets
Stock and inventories
Accounts receivable
Cash and securities
Other current assets
Total assets
Current liabilities
Accounts payable
Short(cid:2)term debt
Long(cid:2)term liabilities
Long(cid:2)term debt
Other long(cid:2)term liabilities
Total liabilities
Minority interest
Equity
Share capital
Retained earnings
Total liabilities and equity
Source: Company, Sberbank CIB Investment Research
Cash flow statement (IFRS), $ mln
Cash receipts from customers
Cash paid to suppliers
Interest paid
Income tax paid
Operating cash flow
Capital expenditures
Other investments, net
Investing cash flow
Increase in debt
Dividends
Additional share issues (purchases)
Financing cash flow
FX and monetary effects on cash
Change in cash position
Cash at beginning of period
Cash at end of period
Source: Company, Sberbank CIB Investment Research
2014
20,370
14,143
6,226
2,968
9,195
(466)
(956)
(1,681)
3,123
(995)
2,128
(26)
2,102
2015
13,425
9,540
3,885
2,274
6,158
(153)
(791)
(93)
2,848
(402)
2,446
(1)
2,445
2016
12,733
8,541
4,192
1,920
6,112
(535)
603
219
4,479
(1,027)
3,452
(1)
3,451
2017
2018E
2019E
2020E
15,163
10,779
4,384
2,617
7,001
(433)
155
39
4,144
(863)
3,281
3
3,283
16,689
11,667
5,022
2,614
7,636
(618)
–
266
4,671
(973)
3,698
3
3,701
17,492
12,081
5,411
2,797
8,209
(462)
–
266
5,216
(1,087)
4,130
4
4,133
18,296
12,479
5,817
2,973
8,790
(275)
–
266
5,808
(1,210)
4,598
4
4,602
2014
2015
2016
2017
2018E
2019E
2020E
31,583
12,398
533
1,790
2,010
8,065
43,981
6,821
3,587
3,234
12,829
10,261
2,568
19,650
471
23,861
5
23,856
43,981
27,691
8,794
481
1,007
1,272
6,033
36,485
3,299
2,181
1,118
12,770
10,750
2,020
16,069
23
20,392
4
20,388
36,485
36,783
8,830
510
1,218
1,230
5,872
45,613
4,844
3,047
1,798
12,472
9,768
2,704
17,317
30
28,267
5
28,261
45,613
42,184
7,949
532
1,349
1,322
4,745
50,133
4,869
2,964
1,905
13,133
10,055
3,078
18,002
31
32,100
5
32,095
50,133
41,400
8,577
616
1,485
1,730
4,745
49,977
5,060
3,155
1,905
9,909
6,894
3,015
14,969
28
34,980
5
34,975
49,977
42,432
9,642
629
1,557
2,711
4,745
52,074
5,169
3,264
1,905
8,693
5,677
3,015
13,862
24
38,188
5
38,183
52,074
43,500
11,705
641
1,628
4,690
4,745
55,204
5,275
3,370
1,905
8,152
5,137
3,015
13,427
20
41,757
5
41,752
55,204
2014
2015
2016
2017
2018E
2019E
2020E
21,824
(14,796)
(884)
507
6,651
(7,952)
2,409
(5,543)
(2,126)
(218)
0
(2,343)
844
(392)
3,184
2,010
14,246
(9,340)
(730)
1,005
5,181
(5,262)
2,009
(3,253)
(1,093)
(47)
(1,325)
(2,465)
170
(366)
2,010
1,272
13,453
(8,784)
(697)
935
4,907
(4,832)
998
(3,833)
(761)
(198)
(146)
(1,104)
(175)
(206)
1,272
1,230
16,261
(10,410)
(790)
604
5,665
(5,263)
546
(4,718)
127
(991)
0
(863)
(3)
82
1,230
1,322
16,553
(8,946)
(979)
(973)
5,656
(3,991)
–
(3,991)
(1,550)
(821)
–
(2,371)
–
(706)
1,322
1,730
17,421
(9,187)
(847)
(1,087)
6,301
(3,830)
–
(3,830)
(1,500)
(925)
–
(2,426)
–
45
1,730
2,711
18,225
(9,413)
(719)
(1,210)
6,883
(4,040)
–
(4,040)
(667)
(1,033)
–
(1,700)
–
1,142
2,711
4,690
40
SBERBANK CIB INVESTMENT RESEARCH
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RUSSIAN OIL AND GAS – TICKLING GIANTS
MAY 2018
Disclosure appendix
IMPORTANT US REGULATORY DISCLOSURES
Within the last 12 months, an affiliate of Sberbank CIB USA managed or co(cid:2)managed a public
offering of the securities of Bashneft, Gazprom, Gazprom Neft, Transneft.
Within the last 12 months, an affiliate of Sberbank CIB USA has received compensation for
investment banking services from Bashneft, Gazprom, Gazprom Neft, Transneft.
In the next three months, an affiliate of Sberbank CIB USA expects to receive or intends to seek
compensation for investment banking services from Gazprom Neft, Transneft.
An affiliate of Sberbank CIB USA makes a market in the securities of Gazprom, Gazprom Neft,
Lukoil, Novatek, Rosneft, Surgutneftegaz, Tatneft, Transneft.
This report may not be independent of Sberbank’s proprietary interests. Sberbank may trade the
securities covered in this report for its own account and on a discretionary basis on behalf of certain
clients. Such trading interests may be contrary to the recommendation(s) offered in this report.
The research analysts, strategists, or research associates principally responsible for the preparation
of this research communication have received compensation based upon various factors, including
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Analyst certification
The following analyst(s) hereby certify that the views expressed in this research report accurately
reflect such research analyst’s personal views about the subject securities and issuers and that no
part of his or her compensation was, is, or will be directly or indirectly related to the specific
recommendations or views contained in the research report: Alex Fak, Anna Kotelnikova.
SBERBANK CIB INVESTMENT RESEARCH
41
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