PJSC SIBUR Holding, the largest integrated petrochemicals company in Russia and one of the fastest-growing companies in the petrochemical industry globally, today announces its operating and financial results for the second quarter and the six months ended 30 June 2021 in accordance with International Financial Reporting Standards (IFRS).

Highlights for Q2 2021:

• Revenue of RUB9 bln, up 15.8% quarter-on-quarter
• EBITDA of RUB5 bln, up 31.2% quarter-on-quarter
• Adjusted profit net of FX of RUB 62.8 bln, up 9% quarter-on-quarter
• EBITDA margin of 48%
• Net Debt to EBITDA decreased from6x to 1.2x amid positive dynamics of operating results

Financial and operating results

¹Adjusted profit equals profit for the period attributable to shareholders of the parent company, adjusted for foreign exchange gain/loss and result of subsidiary’s acquisition and/or disposal and remeasurement of related liabilities and/or assets. ²SIBUR’s share

Peter O’Brien, Chief Financial Officer and member of the Management Board at SIBUR, said:

“The global market recovery has had a positive effect on demand for petrochemical products overall, including continued growth in the consumption of products used in medicine and food packaging. We also benefited considerably from our efforts aimed at increasing the efficiency of product distribution and logistics across various markets, as well as from the development of new sales channels both domestically and in key export markets. As a result, in the second quarter, SIBUR’s revenue was up 15.8% and our EBITDA increased by 31.2% quarter-on-quarter.

“Our robust financial performance including strong operating cash flow enabled us to further optimise our debt portfolio and reduce our Net Debt/EBITDA ratio from 1.6x to 1.2x in both RUB and USD terms.

“In the beginning of July, we successfully closed the order book for a new issue of exchange-traded bonds totalling RUB 10 billion. The issue achieved the narrowest spread to OFZs (ruble-denominated Russian Treasury bonds) on the local bond market in the Company’s history, and the order book was more than five times oversubscribed.

“Earlier in the second quarter, we secured a loan with an interest rate linked to SIBUR’s performance on sustainability targets. This was a logical next step in our integrated approach to our business, allowing us to reduce the cost of borrowing as we deliver on our sustainability goals, and it serves as yet another testimony to our commitment not only to financial efficiency, but also to the principles of sustainable development.”

Financial results

In Q2 2021, revenue increased by 15.8% to RUB 200.9 billion, compared to RUB 173.4 billion a quarter earlier, as a result of the following trends across business segments:

• Revenue in the Olefins & Polyolefins segment increased by6% to RUB 89.3 billion, primarily due to global price dynamics for these products.
• Revenue in the Plastics, Elastomers & Intermediates segment increased by 7% to RUB 51.5 billion, also due to positive price dynamics in RUB terms across all product categories.
• Revenue in the Midstream segment increased by 2% to RUB 47.8 billion, mainly as a result of an increase in external LPG and naphtha sales amid scheduled maintenance works at ZapSibNeftekhim.

In Q2 2021, operating expenses increased by 3.9% quarter-on-quarter from RUB 115.6 billion to RUB 120.1 billion. The result was affected by a significant increase in the cost of feedstock and a rise in transportation and logistics costs, as well as by higher repairs and maintenance costs.

Capital expenditures decreased by 12.1% quarter-on-quarter to RUB 22.2 billion.

Operating results

In Q2 2021, SIBUR’s gas processing plants processed 5 billion cubic metres of APG, up 3.1% quarter-on-quarter, amid an increase in associated petroleum gas (APG) supplies, which are subject to seasonality. Raw NGL fractionation volumes remained nearly unchanged from Q1 2021 at 2 million tonnes. External LPG sales increased by 5% to 702.8 thousand tonnes.

Sales of polypropylene were down 9.5% to 291 thousand tonnes, and sales of polyethylene were down by 11.7% to 383 thousand tonnes, due to an increase in the share of volumes exported to distant markets and stocks accumulated to meet growing domestic demand. Despite a temporary decrease in production volumes, SIBUR met demand for polypropylene and polyethylene, supporting above all domestic customers. Sales of plastics and organic synthesis products remained unchanged from Q1 2021 at 204 thousand tonnes. Sales of elastomers decreased by 13% to 94.5 thousand tonnes.

Borrowings

As of 30 June 2021, the Company’s total debt amounted to RUB 388.1 billion, down 4.4% compared to 31 March 2021. This decrease was, above all, due to the early repayment of the Company’s debt that was used to finance the construction of ZapSibNeftekhim, the redemption of RUB bonds in the amount of RUB 10 billion, as well as due to the appreciation of the Russian ruble against the dollar and the euro.

As of 30 June 2021, SIBUR’s Net Debt decreased by 5.2% to RUB 334.7 billion compared to RUB 353 billion at 31 March 2021.

The Net Debt/EBITDA ratio as of 30 June 2021 was 1.2x in both RUB and USD terms.

Results by segment

Olefins & Polyolefins

¹Including inter-segment transfers; ²EBITDA adjusted for the Group’s portion of EBITDA of joint ventures and associates and net of the non-controlling interest of related subsidiaries’ EBITDA

In Q2 2021, EBITDA in the Olefins & Polyolefins segment reached RUB 51.5 billion, up 41.1% quarter-on-quarter amid strong price dynamics. EBITDA margin increased by 6.4 p.p. quarter-on-quarter to 49.1%. In H1 2021, EBITDA was up 183.4% year-on-year, due to an increase in the production of polypropylene and polyethylene at ZapSibNeftekhim, as well as due to the segment’s price dynamics, which reflected substantial increases off the lows during the peak of the pandemic in 1H 2020. SIBUR continued to meet the demand of the Russian market, supporting above all domestic customers.

External sales of olefins and polyolefins decreased by 9.4% to 765 thousand tonnes quarter-on-quarter. Domestic sales increased by 3.7% while export sales decreased by 20.1%, as sales were re-routed amid stronger domestic demand.

 Plastics, Elastomers & Intermediates

¹Including inter-segment transfers, ²plastics and organic synthesis products, ³intermediates and other chemicals; ⁴EBITDA adjusted for the Group’s portion of EBITDA of joint ventures and associates and net of the non-controlling interest of related subsidiaries’ EBITDA; ⁵transfers from olefins and polyolefins segment

In Q2 2021, the PE&I segment’s EBITDA reached RUB 16.6 billion, up 41.9% quarter-on-quarter, and EBITDA margin was up 4.3 p.p. to 30.7%. EBITDA for H1 2021 came in 5x higher than the same period last year when both demand and prices were strongly affected by the onset of the pandemic.

External sales of plastics, elastomers and intermediates decreased by 8% quarter-on-quarter primarily due to maintenance works at the company’s Voronezh site. Domestic sales decreased by 5.4% while export sales decreased by 15.3%.

Midstream

¹including inter-segment transfers; ²EBITDA adjusted for the Group’s portion of EBITDA of joint ventures and associates and net of the non-controlling interest of related subsidiaries’ EBITDA; ³SIBUR’s share; ⁴including ethane-propane mix volumes.

In Q2 2021, the Midstream segment’s EBITDA increased by 14.1% to RUB 32.7 billion quarter-on-quarter, and by 95.4% year-on-year to RUB 61.4 billion in H1 2021. This result is mainly due to positive price dynamics for LPG and naphtha amid rising oil prices. As a result, the segment’s EBITDA margin was 42.3%, up 2.8 p.p. quarter-on-quarter.

In Q2 2021, external sales of LPG and naphtha increased by 5% and 26.4%, respectively, due to lower internal consumption of these products, as well as due to higher production volumes at ZapSibNeftekhim.

The full version of the Consolidated Audited Financial Information as of and for the six months ended 30 June 2021 in accordance with IFRS is available on our website at http://investors.sibur.com/results-centre/financial-results.aspx?sc_lang=en.