WOOD Flash – Novatek: 4Q17 conference call takeaways - better near-term production profile and prospects for higher returns from Yamal LNG
Novatek hosted a 4Q17 conference call today (22 February 2018), hosted by CEO and largest shareholder, Leonid Mikhelson; and CFO, Mark Gyutvay; which we found quite encouraging. We see upside to the current production estimates, as well as from additional returns from Yamal LNG, as the ramp-up of operations is currently ahead of the plan.While we see upside risks to both our estimates and consensus in 2018E, due to additional gas and condensate production from the Alrosa assets, as well as with some optionality of additional profits from Yamal LNG, we believe the stock broadly reflects this. The company is transitioning from a low-cost domestic gas model (with historically stable volumes and tariff growth), towards a more volatile, capital-intensive LNG production. As such, the historic valuation approach may not be as relevant. We see higher dividend and FCF yields in other companies in the sector, while Novatek’s growth profile is more skewed towards the post-2020E period. We maintain our HOLD recommendation and USD 130 PT.
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.