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«SIBUR» LLC is the managing organization of PJSC «SIBUR Holding».

117218, Moscow, Krzhizhanovsky st., 16/1

SIBUR announces limited operational update for 9 months 2015

2 December 2015 PAO SIBUR Holding, an integrated gas processing and petrochemicals company and a leader in the Russian petrochemicals industry, today publishes limited operational update for the three and nine months ended 30 September 2015.

Key highlights

  • Associated petroleum gas (APG) processing volumes increased by 3.2%(1) year-on-year;
  • Raw natural gas liquids (raw NGL) fractionation volumes increased by 26.3%(2) year-on-year;
  • Polypropylene production volumes increased by 45.8% year-on-year;
  • Liquefied petroleum gas (LPG) sales volumes increased by 22.4% year-on-year;
  • Naphtha sales volumes decreased by 50.6% year-on-year due to the termination of low-margin trading operations via Ust-Luga;
  • Plastics and organic synthesis products sales volumes increased by 21.4% year-on-year;
  • Total revenue increased by 19.3%(3) year-on-year;
  • Revenue from sales of energy products increased by 2.2%(3) year-on-year;
  • Revenue from sales of petrochemicals increased by 40.8% year-on-year;
  • ZapSibNeftekhim financing totaled RR 18.2 billion (net of VAT).
Key highlites
  Three months ended 30 September Change Nine months ended 30 September Change
Tonnes, except as stated 2015 2014 % 2015 2014 %
Processing and production volumes  
APG processing(1) (thousand cubic metres) 5,431,379 5,010,127 8.4% 15,856,036 15,367,259 3.2%
APG processing, SIBUR's share(4) (thousand cubic metres) 5,302,532 5,005,764 5.9% 15,603,020 13,947,193 11.9%
Natural gas production(1) (thousand cubic metres) 4,588,440 4,332,741 5.9% 13,495,487 13,328,927 1.2%
Natural gas production, SIBUR's share(4) (thousand cubic metres) 4,584,519 4,328,974 5.9% 13,468,650 11,966,174 12.6%
Raw NGL fractionation(2)(5) 1,945,773 1,544,309 26.0% 5,726,113 4,533,876 26.3%
Raw NGL fractionation, SIBUR’s share 1,645,773 1,342,059 22.6% 4,826,113 4,204,696 14.8%
Sales volumes  
Natural gas sales volumes (thousand cubic metres) 4,409,848 4,137,438 6.6% 12,961,544 11,491,642 12.8%
LPG sales volumes 1,092,246 798,470 36.8% 3,122,273 2,551,384 22.4%
MTBE, other fuels & fuel additives sales volumes 140,896 155,613 (9.5%) 439,402 448,127 (1.9%)
Petrochemical products sales volumes 608,787 559,445 8.8% 1,950,430 1,591,136 22.6%
Plastics and organic synthesis products 223,234 201,605 10.7% 695,803 573,220 21.4%
Basic polymers 146,789 155,728 (5.7%) 522,285 460,195 13.5%
Synthetic rubbers 100,328 88,644 13.2% 312,804 266,925 17.2%
Intermediates and other chemicals 138,437 113,468 22.0% 419,538 290,796 44.3%
Revenue  
Total energy products sales revenue 46,918 56,063 (16.3%) 134,377 163,457 (17.8%)
Total energy products sales revenue (excl. trading operations)(3) 46,918 42,336 10.8% 133,842 130,954 2.2%
Total petrochemical products sales revenue 43,887 32,920 33.3% 133,842 130,954 2.2%
Other revenue 4,329 3,157 37.1% 11,426 7,545 51.4%
Total revenue 95,134 92,140 3.2% 276,531 263,852 4.8%
Total revenue (excl. trading operations)(3) 95,134 78,413 21.3% 275,996 231,349 19.3%

Operational highlights

Energy Products Sales Revenue
  Three months ended 30 September Change Nine months ended 30 September Change
RR millions, except as stated 2015 % of energy products sales revenue(3) 2014 % of energy products sales revenue(3) % 2015 % of energy products sales revenue(3) 2014 % of energy products sales revenue(3) %
LPG 19,62741.8%17,99442.5%9.1% 58,86144.0%57,36543.8%2.6%
Natural gas 11,11223.7%9,77123.1%13.7% 31,22123.3%27,36120.9%14.1%
Naphtha 8,10817.3%19,75446.7%(59.0%) 23,17717.3%53,97341.2%(57.1%)
Naphtha (excl. trading operations) 8,10817.3%6,02714.2%34.5% 22,64216.9%21,47016.4%5.5%
MTBE 5,77312.3%4,99711.8%15.5% 15,96411.9%13,99510.7%14.1%
Raw NGL 1,3422.9%2,4565.8%(45.4%) 2,2441.7%7,6635.9%(70.7%)
Other fuels and fuel additives 9572.0%1,0912.6%(12.3%) 2,9092.2%3,1002.4%(6.2%)
Total energy products sales revenue 46,918n/m56,063n/m(16.3%) 134,377n/m163,457n/m(17.8%)
Total energy products sales revenue (excl. trading operations)(3) 46,918100.0%42,336100.0%10.8% 133,842100.0%130,954100.0%2.2%

In the nine months ended 30 September 2015, our revenue from sales of energy products adjusted for estimated value of naphtha trading operations via Ust-Luga increased by 2.2% year-on-year to RR 133,842 million. Without such adjustment, in the nine months ended 30 September 2015, our revenue from sales of energy products decreased by 17.8% year-on-year to RR 134,377 million on lower revenue from sales of naphtha and raw NGL, partially compensated by an increase in revenue from sales of natural gas, MTBE and LPG. The decrease in revenue from sales of naphtha was attributable to lower sales volumes, as we ceased trading operations via the Ust-Luga transshipment facility. The decrease in raw NGL revenue was a result of increased internal use for the production of higher value-added products. The increase in natural gas revenue was a result of changes in the terms of cooperation with Rosneft and the full consolidation of Yugragazpererabotka in March 2014. Revenue from sales of MTBE increased on higher average selling price; the increase in revenue from sales of LPG was a result of higher production and sales volumes. Collapsed pricing in international markets was largely compensated by alleviation of export duties and the Russian rouble depreciation.

  • LPG: sales revenue up 2.6% year-on-year to RR 58,861 million; sales volumes up 22.4% year-on-year on an 18.6% increase in production following the launch of integrated transportation and fractionation capacities in 2014, which enabled SIBUR to process increased volumes of available light raw NGL feedstock. The increase in production was partially offset by the growth in internal sales to the petrochemicals business on higher Tobolsk-Polymer capacity utilisation. The effective average selling price down 16.2% in RR terms following the dynamics of international market prices in RR terms.
  • Natural gas: sales revenue up 14.1% year-on-year to RR 31,221 million due to the full consolidation of natural gas volumes produced at the GPPs of Yugragazpererabotka after gaining full control over the JV in March 2014.
  • Naphtha: sales revenue down 57.1% year-on-year to RR 23,177 million; sales volumes down 50.6% year-on-year following the termination of purchases of the product for resale.
  • MTBE: sales revenue up 14.1% year-on-year to RR 15,964 million on a 14.6% increase in the effective average selling price in RR terms following the dynamics of international market prices in RR terms.
  • Raw NGL: sales revenue down 70.7% year-on-year to RR 2,244 million; sales volumes down 73.1% year-on-year on a 14.8% increase year-on-year in fractionation volumes following the expansion of fractionation capacity and a 42.0% increase year-on-year in volumes processed at SIBUR petrochemical production sites.
  • Export duties: support for LPG and naphtha netbacks on lower export duties; 68.2% decrease in naphtha export duty (in USD terms); zeroing of LPG export duty from February 2015 as compared to the average export duty of USD 148 in the nine months ended 30 September 2014.
Petrochemical Products Sales Revenue
  Three months ended 30 September Change Nine months ended 30 September Change
RR millions, except as stated 2015 % of petchem sales revenue(3) 2014 % of petchem sales revenue(3) % 2015 % of petchem sales revenue(3) 2014 % of petchem sales revenue(3) %
Plastics and organic synthesis products 16,69638.0%11,66135.4%43.2% 47,72336.5%33,01235.6%44.6%
Basic polymers 11,22525.6%9,44028.7%18.9% 36,70528.1%26,13528.1%40.4%
Synthetic rubbers 9,14720.8%6,63620.2%37.8% 26,57320.3%20,12421.7%32.0%
Intermediates and other chemicals 6,81915.5%5,18215.7%31.6% 19,72715.1%13,57814.6%45.3%
Total petrochemical products sales revenue 43,887100.0%32,920100.0%33.3% 130,728100.0%92,849100.0%40.8%

In the nine months ended 30 September 2015, our revenue from sales of petrochemical products increased by 40.8% year-on-year to RR 130,728 million on higher sales of basic polymers, plastics and organic synthesis products, as well as certain intermediates and other chemicals as a result of capacity expansions and support from Russian rouble depreciation. Synthetic rubbers showed slight recovery as compared to a low base of 2014 benefiting from lower feedstock costs.

  • Plastics and organic synthesis products: sales revenue up 44.6% year-on-year to RR 47,723 million on higher sales volumes of glycols by 97.8%, PET by 17.1%, and BOPP-films by 29.4%, following capacity expansions, as compared to the low base of 2014 inter alia as a result of lengthy shutdowns in Kstovo and Dzerzhinsk in 2014.
  • Basic polymers: sales revenue up 40.4% year-on-year to RR 36,705 million primarily due to 28.4% growth in PP sales volumes following a year-on-year increase in Tobolsk-Polymer Plant average capacity utilisation rate. The growth was also driven by higher average selling prices for PP and LDPE due to the Russian rouble depreciation.
  • Synthetic rubbers: sales revenue up 32.0% year-on-year to RR 26,573 million due to higher capacity load on collapsed feedstock pricing and Russian rouble depreciation as compared to a low base of 2014. Completed homologation with key clients for thermoplastic elastomers additionally contributed to the revenue growth. Sales volumes of commodity rubbers and thermoplastic elastomers increased by 14.5% and 59.8%, respectively.
  • Intermediates and other chemicals: sales revenue up 45.3% year-on-year to RR 19,727 million, primarily due to higher revenue from sales of ethylene and propylene due to the increase in production inter alia following the expansion of the cracking capacity in Kstovo in 2014, as well as higher revenues from sales of ethylene oxide following the expansion of ethylene oxide capacity at the production site in Dzerzhinsk in 2014.

Decline in international market prices in USD terms was at a lower rate compared to the collapse in hydrocarbon feedstock pricing, while Russian rouble depreciation was a natural hedge to our effective average selling prices despite declined market prices for most products.

Key Feedstock Purchases
  Three months ended 30 September Change Nine months ended 30 September Change
RR millions, except as stated 2015 2014 % 2015 2014 %
APG5,6685,5601.9%16,33714,23114.8%
NGLs6,5156,4770.6%18,69619,081(2.0%)
Paraxylene1,8291,16557.0%4,8363,67831.5%
Polypropylene5521,991(72.3%)1,4584,309(66.2%)

In the nine months ended 30 September 2015, our hydrocarbon feedstock purchases were impacted by the full consolidation of Yugragazpererabotka from March 2014, when we changed approach to the treatment of APG and NGLs, while there were no changes to the available volumes at operational level.

  • APG: purchasing expenses up 14.8% year-on-year to RR 16,337 million; purchasing volumes up 11.9% and purchase price up 2.6% year-on-year due to the consolidation of Yugragazpererabotka and the related new terms of cooperation with Rosneft; 3.2% increase year-on-year in total processing volumes.
  • NGLs: purchasing expenses down 2.0% year-on-year to RR 18,696 million; purchasing volumes up 2.6% and average purchase price down 4.5% year-on-year due to the consolidation of Yugragazpererabotka.
  • Paraxylene: purchasing expenses up 31.5% year-on-year to RR 4,836 million; purchasing volumes up 8.6% on an 8% increase year-on-year in PET production volumes and 21.1% increase year-on-year in average purchase price, reflecting the tax maneuver in the Russian oil industry in 2015(6).
  • Polypropylene: purchasing expenses down 66.2% year-on-year to RR 1,458 million; purchasing volumes down 74.0% due to substitution of feedstock purchases by internal PP production on higher Tobolsk-Polymer capacity utilisation.

Capital expenditures

The following table presents data on financing of our key investment projects for the three and nine months ended 30 September 2015 and 2014:

Capital expenditures
RR millions, except as stated Three months ended 30 September Nine months ended 30 September  
Location Description 2015 2014 2015 2014 Completion
Feedstock and Energy
Gas fractionation / gas processing capacity modernisation and expansion
TobolskSecond GFU expansion790261,8491502016
Yamal-Nenets Autonomous AreaAPG processing capacity expansion at Vyngapurovskiy GPP1,6471,1515,2604,0062015
Petrochemicals
TobolskZapSibNeftekhim (ZapSib-2)5,30312,08318,21912,8762020
TomskExpansion of PP and LDPE production1,0159402,6891,4962016

Borrowings

Total Debt and Net Debt
  Change, %
RR millions, except as stated As of 30 September 2015 As of 30 June 2015 As of 31 December 2014 Change, % vs 30 Jun 2015 30 Sept 2015 vs 31 Dec 2014
Total debt278,174254,067206,2949.5%34.8%
Cash and cash equivalents6,2979,89727,667(36.4%)(77.2%)
Bank deposits8,6008,967-(4.1%)n/m
Net debt263,277235,203178,62711.9%47.4%
Debt Maturity Profile
RR millions, except as stated As of 30 September 2015 % of total borrowings As of 30 June 2015 % of total borrowings As of 31 December 2014 % of total borrowings Change, %
30 Sept 2015 to 31 Dec 2014
Due for repayment:
Within one year 85,722 30.8% 92,983 36.6% 56,240 27.3% 52.4%
Between one and two years 30,986 11.1% 18,448 7.3% 31,500 15.3% (1.6%)
Between two and five years 141,884 51.0% 125,114 49.2% 105,062 50.9% 35.0%
After five years 19,582 7.0% 17,522 6.9% 13,492 6.5% 45.1%
Total debt 278,174 100.0% 254,067 100.0% 206,2944 100.0% 34.8%
Debt Currency Structure
RR millions, except as stated As of 30 September 2015 % of total borrowings As of 30 June 2015 % of total borrowings As of 31 December 2014 % of total borrowings Change, %
30 Sept 2015 to 31 Dec 2014
Denominated in:
Russian rouble 59,182 21.3% 65,293 25.7% 39,030 18.9% 51.6%
Euro 17,037 6.1% 13,340 5.3% 8,112 3.9% 110.0%
US Dollar 201,954 72.6% 175,434 69.1% 159,152 77.1% 26.9%
Total debt 278,174 100.0% 254,067 100.0% 206,2944 100.0% 34.8%
  • Total debt: a 9.5% increase to RR 278,174 million vs. 30 June 2015 mainly due to RR depreciation, while a 34.8% increase vs. 31 December 2014 was attributable to the new borrowings to fund the acquisition of a 49% stake in Yugragazpererabotka (fully paid in April 2015), first drawdown of EUR 115 million out of EUR 1,676 million ECA-backed committed credit line for ZapSibNeftekhim (ZapSib-2).
  • Net debt: an 11.9% increase to RR 263,277 million vs. 30 June 2015 and a 47.4% increase vs. 31 December 2014, which was attributable to the growth in total debt and lower cash balances due to repayment of the USD 1 billion related to OOO Yugragazpererabotka acquisition from accumulated cash.
  • Credit lines: RR 255,275 million available under existing credit facilities denominated in Russian roubles, US dollars and euros, both short- and long-term, of which an equivalent of RR 150,610 million committed.

The published data may be revised when we publish the IFRS audited consolidated financial information as of and for the year ended 31 December 2015 and supporting MD&A.


(1) Including Rosneft’s share in the processing / production volumes of OOO Yugragazpererabotka in the first quarter of 2014.

(2) Including fractionation volumes under processing arrangements.

(3) Revenue adjusted for estimated value of naphtha trading operations via Ust-Luga, ceased in 2015.

(4) Excluding Rosneft’s share in the processing / production volumes of OOO Yugragazpererabotka in the first quarter of 2014.

(5) Following the acquisition of control in OOO Yugragazpererabotka, we changed our approach to the treatment of raw NGL production and fractionation volumes at Nyagan GPP.

(6) As part of the tax maneuver in the Russian oil industry, starting 2015 an excise duty was set for paraxylene, while previously it was not subject to it, which resulted in a 21.1% increase year-on-year in the effective average purchase price. However, SIBUR is eligible for an offsetting tax deduction, as we process paraxylene into non-excisable petrochemical products. The related reverse will be reflected as recoverable excise in our operating expenses.

Contacts for Media

Press Office

Anna Lebed

International Media Relations

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