WOOD Flash – Rosneft: 1Q20 – strong FCF and net debt reduction
On Friday (15 May), Rosneft reported strong FCF, reduced its net debt (including prepayments) by USD 13.5bn, and continued to reduce its key cost items – all developments that we view as positive. We also note that, due to a lag in export duties, the company faced a temporary headwind of RUB 98bn in the period. With a reduced share count following the sale of the Venezuelan assets and lower net debt, the company is trading at 6.6x P/E and 4.2x EV/EBITDA, on our FY21E estimates. We reiterate our BUY rating, highlighting the company’s diverse portfolio and advanced logistics, which should help it to better address the temporary demand shock.
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.
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