Russneft 2H 19 - When exact figures do not matter anymore
Yesterday, the company reported 2H and FY 19 results, which, although better on EBITDA (on more moderate opex growth) and FCF (on capex cuts) than expected, are overshadowed by the current oil price environment, vague loans to affiliated companies (RUB 16 bn, which basically wipes out all of the one-off trade paybables hike in 2019), guarantees provided to third parties and the forward contract on own shares with VTB. Thus, we remain negative on Russnefts ordinaries.NK Russneft' PAO is a Russia-based company engaged in the oil and gas industry. It is mainly involved in the extraction and distribution of crude oil, as well as production of associated petroleum gas (APG), natural gas and gas processing. The Company and its subsidiaries hold more than100 subsoil licenses and operate over 125 oilfields. The Company's extraction operations are structured into three geographical groups: West Siberian Group, Volga Region Group and Central Siberian Group. In addition, the Company operates on the territory of Azerbaijan. NK Russneft' PAO operates in various regions of Russia and in Belarus. The Company has its own research and technology center. The Company supplies oil both to Russian market and to export markets of Commonwealth of Independent States (CIS) and other countries, including Hungary and Slovakia.
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