Moscow, 21 February 2019. ПPAO SIBUR Holding, an integrated petrochemicals company, today publishes its operational and financial results for the fourth quarter and full year ended 31 December 2018 in accordance with International Financial Reporting Standards (IFRS).
Operational and financial highlights for FY 2018
SIBUR’s CEO Dmitry Konov commented:
“2018 was a year of great success for us, as we achieved record-breaking financial results and confidently reached the final stage on the way to the launch of ZapSibNeftekhim, one of the world’s largest polyolefin production facilities. This large-scale investment project is the largest single-unit polyolefin production facility, which will become a landmark event post-launch not only for SIBUR, but also for the entire Russian petrochemical sector, supplying a wide range of industries, including FCMG, automotive industry, construction and pharmaceuticals. As a result of the professionalism and synergetic efforts of the SIBUR team through the whole year, the project is well ahead of the original schedule, and the mechanical completion is now scheduled for Q2 2019 instead of late 2019.
In 2018, the Company’s revenue increased by 25.1% due to favourable pricing of petrochemical products, rising beyond RUB 0.5 tn. Despite a surge in petrochemical feedstock prices in the reporting period, the Company’s EBITDA also grew by 25%. The EBITDA margin remained consistently high at over 35%, primarily due to the Company’s balanced business model and returns on earlier investments. Due to our carefully considered financial policy, leverage remained at the same comfortable level as reported last year. Our results in 2018 will further support the Company’s strategy to diversify its sales markets, to increase the share of high added value cutting-edge products, and to improve operational efficiency.”
In 2018, SIBUR’s gas processing plants (GPPs) processed 22.3 billion cubic metres(2) of APG, almost on a par with the previous year. As a result, production of stripped dry gas (SDG) totalled 19.4 billion cubic metres(2). Raw NGL fractionation volumes increased by 2.5% year-on-year reaching 7.7 million tonnes(1). Additional volumes contributed to an increase in LPG sales volumes of 8.8% year-on-year, to 5.4 million tonnes. SDG sales volumes remained flat year-on-year at 18.5 billion cubic metres.
SIBUR increased sales volumes of most of its petrochemical products. Sales of plastics and organic synthesis products increased by 3.8% year-on-year to 800 thousand tonnes as a result of higher alcohols production due to a two-year maintenance cycle at our production site in Perm, accompanied by higher glycols output due to increased productivity and the start of production of a new type of polystyrene since June 2018. Sales of elastomers remained flat year-on-year at 486 thousand tonnes. Sales of polypropylene decreased by 2.5% year-on-year to 583 thousand tonnes due to a maintenance shutdown in Tobolsk. Sales of polyethylene (LDPE) decreased by 2.2% year-on-year to 262 thousand tonnes driven by planned maintenance shutdown of our production site in Tomsk.
|3 months ended 31 December||Change||Year ended 31 December||Change|
|Thousand tonnes, except as stated||2018||2017||%||2018||2017||%|
|APG processing, SIBUR’s share (mln cubic metres)(2)||5 834||5 791||0,7||22 283||22 280||0,0%|
|NGL volumes purchased||983||813||20,9%||3 490||3 013||15,8%|
|Raw NGL fractionation, SIBUR’s share (1)||2 035||2 030||0,2%||7 712||7 522||2,5%|
|Petrochemical products, including:||931||930||0,1%||3 686||3 625||1,7%|
|Plastics and organic synthesis products||203||188||8,0%||800||771||3,8%|
|Intermediates and other chemicals||129||137||(5,8%)||483||520||(7,1%)|
|Midstream segment products, including:||1 786||1 596||11,9%||6 402||5 805||10,3%|
|LPG||1 464||1 384||5,8%||5 357||4 924||8,8%|
EBITDA increased by 25.0% year-on-year to RUB 201.0 billion driven by the strong performance of the Midstream segment and the Plastics, Elastomers and Intermediates segment. Growth was partially offset by weaker Olefins & Polyolefins segment EBITDA, primarily reflecting tighter spreads. Over the past five years SIBUR’s EBITDA increased by 2.5x, with the rise of more than 5x in the Olefins and Polyolefins segment.
|RUB billions||2018 год||2017 год||2016 год||2015 год||2014 год||2013 год|
Net profit decreased by 7.9% year-on-year to RUB 110.8 billion. The main factor was the reflection of the gain on the disposal of Uralorgsintez recorded in 2017 versus a substantial FX loss in 2018 due to the depreciation of the Russian ruble against the euro and US dollar and the corresponding revaluation of the Company’s FX-denominated debt in 2018.
Capital expenditures(3) increased by 12.0% year-on-year to 151.4 billion as a result of the ZapSib transition to the final stage of the project implementation, as well as the depreciation of the Russian ruble against the euro and US dollar that affected payments in these currencies. Substantial progress was made on ZapSibNeftekhim construction: as of 31 December 2018, the project was 92.5% complete, compared to 71% as of 31 December 2017. As of 31 December 2018, investment in the project totalled RUB 411.9 billion, or approximately USD 6.9 billion
|3 months ended 31 December||Change||Year ended 31 December||Change|
|RUB millions, except as stated||2018||2017||%||2018||2017||%|
|Revenue (net of VAT and export duties):||154 631||130 044||18,9%||568 647||454 619||25,1%|
|Olefins & Polyolefins||25 970||23 784||9,2%||100 862||88 135||14,4%|
|Plastics, Elastomers & Intermediates||46 221||36 716||25,9%||171 003||146 877||16,4%|
|Midstream segment||66 768||56 670||17,8%||240 818||184 199||30,7%|
|EBITDA||50 853||45 021||13,0%||201 007||160 851||25,0%|
|Net cash from operating activities||33 595||41 500||(19,0%)||160 409||152 677||5,1%|
|Net cash used in investing activities, including:||(30 401)||(38 810)||(21,7%)||(133 286)||(106 035)||25,7%|
|Capital expenditures(3)||(46 489)||(48 372)||(3,9%)||(151 438)||(135 261)||12,0%|
In 2018, total debt increased by 6.4% year-on-year to RUB 332.4 billion as of 31 December 2018. The increase was attributable to new drawdowns of ZapSib-related financing, as well as to the depreciation of the Russian ruble against the euro and US dollar. The increase in total debt was partially compensated by a decrease in debt not related to ZapSib.
Net debt(4) increased by 20.4% year-on-year to RUB 317.6 billion.
The net debt to EBITDA ratio remained flat at 1.6х.
|RUB millions||As of 31 December 2018||As of 31 December 2017||Change, %|
|Total debt||332 411||312 344||6,4%|
|Debt excluding related to ZapSib||86 637||139 147||(37,7%)|
|ZapSib related debt||245 774||173 197||41,9%|
|Cash and cash equivalents||14 783||48 456||(69,5%)|
|Net debt||317 628||263 888||20,4%|
|Net debt excluding related to ZapSib||74 770||102 744||(27,2%)|
|ZapSib related net debt||242 858||161 144||50,7%|
The full version of the audited consolidated financial statements as of and for the year ended 31 December 2018 in accordance with International Financial Reporting Standards (IFRS) is available on our website http://investors.sibur.com/results-centre/financial-results.aspx?sc_lang=ru-RU .
SIBUR is the leader of the Russian petrochemical industry and one of the largest companies globally in this sector. It has more than 26,000 employees. The Company’s unique vertically integrated business model allows it to create highly competitive products consumed in the chemical, fast moving consumer goods (FMCG), automotive, construction, energy and other industries in 80 countries worldwide.
SIBUR helps to reduce CO2 emissions stemming from the burning of oil extraction by-products, such as associated petroleum gas (APG), by recycling them instead. In 2018, SIBUR processed 22.3 billion cubic metres of APG thus cutting greenhouse emissions by 72 million tonnes, which is equivalent to the annual CO2 footprint of a middle-sized European country.
In 2018, SIBUR reported revenue of USD 9.1 billion and adjusted EBITDA of USD 3.3 billion.
(1) Including volumes processed at third-party capacities and excluding third-party volumes processed at SIBUR’s capacities
(2) Excluding third-party volumes processed at SIBUR’s capacities
(3) Including acquisition of primary assets, intangibles and other noncurrent assets
(4) Net debt is calculated as total debt less cash and cash equivalents
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