Transneft 4Q 19 - FCF propped up by lower than expected capex and WC
Last Friday evening, Transneft reported 4Q 19 results, which were almost in line with our and consensus estimates on revenue and EBITDA. The latter was expectedly down yoy on the back of a one-off positive pension provision effect in opex in 4Q 18 and down qoq on the back of lower qoq (-3% qoq) crude transportation and seasonally higher opex (salaries, repairs etc.) at the end of the year. Nevertheless, FCF overshoot our expectations mainly on the back of lower than forecast capex, which we treat as positive.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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