Surgutneftegas 2H 19 - FCF ahead of estimates supported by changes in WC
Today Surgutneftegas published its 2H 19 financial results, which came in close to our estimates on revenue, while EBITDA was slightly weaker than expected. Besides, we missed net income due to significant other non-operating expenses of USD 330 mn in 2H 19. At the same time, net operating cash flow came in stronger than projected on the back of considerable positive effect from changes in working capital (over USD 0.9 bn). As a result, even with higher than expected capital expenditures, the companys free cash flow beat our estimates and stood at USD 2.3 bn.
Surgutneftegaz is vertically integrated oil company based in Russia. Co.'s activities include prospecting and exploration of hydrocarbons, oil and oil and- gas fields development and construction; oil products and petrochemicals manufacturing and marketing; power generation; gas processing and gas products marketing. Co.'s operations expand beyond Western Siberia in 3 oil production centers, two of which, in Eastern Siberia and Timano- Pechora, are to be built up within the next 3 years. Co. operates in 16 constituent territories of the Russian Federation from Republic of Sakha (Yakutia) to Kaliningradskaya Oblast. Co.'s mineral resource base comprises 134 license areas of 120,000 sq. km.
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