Transneft 2Q 20 - FCF, NI pressed by one-offs, EBITDA on point
On Friday evening, the company reported in-line results on EBITDA compared to our estimates, with the results negatively impacted yoy on the expected transportation slump driven by the OPEC+ deal. Nevertheless, FCF was pressed down by negative WC one-offs, while NI was below our and consensus estimates mainly as a result of non-cash write-offs on the oil product pipelines, which investment payback is dependent on the Euro-5 diesel fuel exports hit by lower yoy oil production and lagging modernisation of the Russian refineries. Excluding these one-offs, we treat the results as neutral. Since the write-offs are non-cash, they are likely not to affect the dividend base.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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