LUKoil 4Q 19 - 2019e DPS likely above expectations at RUB 550/share
Today, LUKoil published its 4Q 19 IFRS results, which are in line with both market and our estimates on revenue and EBITDA. The net income came in significantly lower on non-cash items related to the impairment on lower oil price forecasts. However, it would not impact dividend payments forecast as the dividend policy is based on free cash flow, which came in stronger vs our projections on positive effect of USD 705 mn from changes in working capital. Free cash flow after interest and excluding change in working capital came in almost in line with our projections. We should also mention that LUKoil has not been purchasing its shares from the market. Overall, the total 2019e DPS should be higher compare to our initial forecast. Based on our calculation the 2019e DPS may be at RUB 550/share, with the final DPS of RUB 358/share. The final amount should be adjusted on lease expenses.PJSC Lukoil is a vertically-integrated oil company engaged in the exploration and production of crude oil and natural gas. Co. is engaged in all main sectors of the modern oil business including supplies, refining, marketing, transportation, petrochemicals and oil-related activities. Co.'s operations are divided into five business segments: Exploration and Production; Refining, Marketing and Distribution; Chemicals; Power Generation and Other Business Segments. Co. owns and operates refineries in Bulgaria (LUKOIL Neftochim Bourgas AD) and Romania (Petrotel-LUKOIL).
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