Transneft 1Q 20 - Neutral results apart from one-off WC effect
Transneft has reported 1Q 20 IFRS results, which we treat as neutral given EBITDA close to expectations (both our and consensus) and no drastic capex cuts yet. EBITDA growth yoy was expectedly driven by tariff indexation (by 3.4%). On the negative side, due to USD appreciation against RUB the company has increased the contaminated oil compensation provision by RUB 4.9 bn but this was made up for by lower than expected net interest expenses. NI came in above our expectations but mainly over higher than expect FX gains and probably lower than expected negative effects of revaluation of own shares owned via Gazprombank Financial Fund.Transneft is an oil pipeline group based in the Russian Federation. Co. and its subsidiaries operate a crude oil pipeline system totalling 50,142 km. Co. transport millions of tons of crude oil to domestic and export markets. Co. produces a substantial majority of the crude oil in the territory of the Russian Federation. In addition, Co., through Group Transnefteproduct operates an oil products pipeline system in the Russian Federation and in the Republics of Belarus and Ukraine totalling 18,746 km. Through its associate OOO LatRosTrans, Co. operates an interconnected system in the Latvian Republic.
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