WOOD Flash – Tatneft: 4Q18 results – higher costs, robust FCF
Tatneft has reported slightly disappointing results for 4Q18, mainly on higher cost inflation and higher-than-expected capex. However, the FCF came in close to our estimates, which is the most important driver for dividends (as they are based on 100% FCF distribution). We view some of the costs hike as temporary, driven by the usual pick-up in maintenance activity at the end of the year (which was deferred in previous years due to the weak macro). Besides this, we estimate that Tatneft has built up c.0.2mt of crude inventories, as upstream volumes increased by 0.2mt qoq, while sales have not changed. Assuming that Tatneft sells its inventory during 1Q19, this could add c.USD 100m (RUB 6bn) to sales and USD 72m (RUB 5bn) to EBITDA (a c.8% gain), on our estimates. We see 2019 as an important year for Tatneft, as it launches gasoline production at TANECO, and aims to increase the overall capacity and utilisation of its refinery, which should contribute to organic growth, on top of 3% long-term upstream production growth.
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.