SIBUR announces limited operational update for 9 months 2016

Moscow, 17 November 2016. 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 2016.

KEY HIGHLIGHTS FOR 9 MONTHS 2016

  • Associated petroleum gas (APG) processing volumes increased by 6.9% (1) ( [1] ) year-on-year;
  • Natural gas production volumes increased by 8.0% (1) year-on-year;
  • Raw natural gas liquids (raw NGL) fractionation volumes increased by 4.1% (2) ( [2] ) year-on-year;
  • Liquid hydrocarbons sales volumes increased by 12.8% year-on-year;
  • Polypropylene sales volumes increased by 12.3% year-on-year;
  • Total revenue increased by 8.6% year-on-year;
  • Revenue from sales of energy products increased by 3.3% year-on-year;
  • Revenue from sales of petrochemicals increased by 8.7% year-on-year.

Key highlites
Three months ended
30
September
Change, Nine months ended
30
September
Change,
Tonnes, except as stated 2016 2015 % 2016 2015 %
Processing and production volumes
APG processing (1) (thousand cubic metres) 5,901,360 5,390,615 9 .5% 16,812,048 15,722,096 6. 9 %
APG processing, SIBUR's share (3) ( [3] ) (thousand cubic metres) 5,789,964 5,302,532 9.2% 16,457,833 15,603,020 5.5%
Natural gas production (1) (thousand cubic metres) 5,106,991 4,588,440 11.3% 14,571,471 13,495,487 8.0%
Natural gas production, SIBUR's share (3)
(thousand cubic metres)
5,021,369 4,584,519 9.5% 14,298,283 13,468,650 6.2%
Raw NGL fractionation (2) 2,327,390 1,945,773 19.6% 5,959,618 5,726,113 4.1%
Raw NGL fractionation, SIBUR’s share 2,034,890 1,645,773 23.6% 5,329,058 4,826,113 10.4%
Sales volumes
Natural gas (thousand cubic metres) 4,818,103 4,409,848 9.3% 13,685,342 12,961,544 5.6%
Liquid hydrocarbons 1,691,912 1,494,529 13 . 2% 4,685,981 4,155,083 12 . 8%
MTBE, other fuels & fuel additives 175,843 140,896 24 . 8% 492,171 439,402 12.0%
Petrochemical products 636,867 608,787 4 . 6% 2,029,159 1,950,430 4 . 0%
Plastics and organic synthesis products 227,818 223,234 2.1% 706,572 695,803 1.5%
Basic polymers 172,422 146,789 17.5% 544,194 522,285 4.2%
Synthetic rubbers 106,636 100,328 6.3% 335,278 312,804 7 . 2%
Intermediates and other chemicals 129,992 138,437 (6.1%) 443,116 419,538 5 . 6%
Revenue (RR millions)
Total energy products sales revenue 50,758 46,918 8.2% 138,776 134,377 3.3%
Total petrochemical products sales revenue 45,569 43,887 3.8% 142,121 130,728 8.7%
Other revenue 7,792 4,329 80.0% 19,346 11,426 69.3%
Total revenue 104,119 95,134 9 . 4% 300,243 276,531 8.6%

OPERATIONAL HIGHLIGHTS


Energy Products Sales Revenue
Three months ended 30 September Change, Nine months ended 30 September Change,
RR millions, except as stated 2016 % of energy products sales 2015 % of energy products sales revenue % 2016 % of energy products sales revenue 2015 % of energy products sales revenue %
Liquid hydrocarbons 32,875 64 . 8% 29,077 62 . 0% 13 . 1% 86,917 62 . 6% 84,282 62 . 7% 3 . 1%
Natural gas 12,095 23.8% 11,112 23 . 7% 8.8% 34,468 24.8% 31,221 23.2%  10.4%
MTBE 4,879 9.6% 5,773 12 . 3% (15.5%) 14,802 10.7% 15,964 11.9% (7.3%)
Other fuels and fuel additives 909 1.8% 957 2 . 0% (5.0%) 2,589 1.9% 2,909 2.2% (11.0%)
Total energy products sales revenue 50,758 100% 46 , 918 100% 8.2% 138 , 776 100% 134 , 377 100% 3.3%

In the nine months ended 30 September 2016, our revenue from sales of energy products increased by 3.3% year-on-year to RR 138,776 million primarily on higher revenue from sales of liquid hydrocarbons and natural gas, partially offset by lower revenue from MTBE sales. 

  • Liquid hydrocarbons: sales revenue up 3.1% year-on-year to RR 86,917 million on a 12.8% higher sales volumes as a result of fractionation capacity expansion in Tobolsk in the middle of 2016, as well as higher raw NGL supplies from NOVATEK.
  • Natural gas: sales revenue up 10.4% year-on-year to RR 34,468 million. Sales volumes up 5.6% on higher production volumes following the increase in APG processing as a result of recent capacity expansions. Effective average selling price up 4.6% on a 7.5% indexation of the regulated natural gas prices in July 2015.

  • MTBE: sales revenue down 7.3% year-on-year to RR 14,802 million. Effective average selling price down 18.4% following the dynamics of international market prices in RR terms. Sales volumes up 13.6% year-on-year on a 14.4% increase in production following capacity expansion, as well as higher feedstock availability due to shutdowns at the production of feedstock for MTBE a year earlier.
Petrochemical Products Sales Revenue
Three months ended 30 September Nine months ended 30 September
RR millions, except as stated 2016 % of petchem sales revenue 2015 % of petchem sales revenue Change, % 2016 % of petchem sales revenue 2015 % of petchem sales revenue Change, %
Plastics and organic synthesis products 15,966 35.0% 16,696 38.0% (4.4%) 49,273 34.7% 47,723 36.5% 3.2%
Basic polymers 13,481 29.6% 11,225 25.6% 20.1% 42,567 30.0% 36,705 28.1% 16.0%
Synthetic rubbers 9,902 21.7% 9,147 20.8% 8.3% 29,596 20.8% 26,573 20.3% 11.4%
Intermediates and other chemicals 6,220 13.6% 6,819 15.5% (8.8%) 20,685 14.6% 19,727 15.1% 4.9%
Total petrochemical products sales revenue 45,569 100.0% 43,887 100.0% 3.8% 142,121 100.0% 130,728 100.0% 8.7%

In the nine months ended 30 September 2016, our revenue from sales of petrochemical products increased by 8.7% year-on-year to RR 142,121 million with each petrochemical product group contibuting to the growth. Revenues from sales of basic polymers increased on higher polypropylene sales volumes and benefited from favorable market environment domestically supported by the Russian rouble depreciation. The increase in revenue from synthetic rubbers sales was a result of higher production capacity utilisation of commodity rubbers and completed homologation of thermoplastic elastomers with key clients a year earlier. The growth in revenue from sales of plastics & organic synthesis products was primarily driven by higher sales of BOPP-films and glycols on higher capacity utilisation rates.

  • Plastics and organic synthesis products: sales revenue up 3.2% year-on-year to RR 49,273 million primarily driven by higher BOPP-film and glycols sales volumes on increased production volumes.
  • Basic polymers: sales revenue up0% year-on-year to RR 42,567 million primarily driven by higher PP sales volumes on increased capacity utilisation rate at our production site in Tobolsk. The growth was also attributable to higher average selling prices for PP and LDPE due to the Russian rouble depreciation and favourable market environment domestically.
  • Synthetic rubbers: sales revenue up 11.4% year-on-year to RR 29,596 million on higher revenue from sales of commodity rubbers and thermoplastic elastomers primarily due to completed homologation with key clients for thermoplastic elastomers a year earlier, as well as higher commodity rubbers production due to shorter maintenance shutdowns as compared to the respective period of 2015. The effective average selling price for commodity rubbers was supported by the Russian rouble depreciation and local shortage due to the third-party production shutdown. Prices for thermoplastic elastomers were positively affected by canceled discounts applied for premarketing sales in 2015.
Other Revenue
Three months ended
30 September
Change None months ended
30 September
Change
RR millions, except as stated 2016 2015 % 2016 2015 %
Other revenue 7,792 4,329 80.0% 19,346 11,426 69.3%

In the nine months ended 30 September 2016, other revenue increased by 69.3% year-on-year to RR 19,346 million, which was primarily attributable to higher revenue of NIPIGAZ and sales of power following the acquisition of Tobolsk Heating and Power Plant in February 2016.

Capital Expenditures

The following table presents data on financing of our key investment projects for the three and nine months ended 30 September 2016 and 2015:

Capital expenditures
RR millions (net of VAT) Three months ended
30 September
Nine months ended
30 September
Completion
Location Description 2016 2015 2016 2015
Tobolsk ZapSibNeftekhim 23,224 5,303 96,698 18,219 2020
Tomsk Expansion of PP and LDPE production 846 1,015 2,980 2,689 Completed
Tobolsk Second GFU expansion 605 790 2,015 1,849 Completed

Borrowings

Total Debt and Net Debt
RR millions, except as stated As of
30 September 2016
As of
30 June
2016
As of
31 December 2015
Changе, % 30 Sep 2016 vs 30 Jun 2016 Changе, % 30 Sep 2016 vs 31 Dec 2015
Total debt 366,118 367,984 457,149 (0 .5%) (19.9%)
Debt excluding related to ZapSibNeftekhim 204,332 221,314 299,004 (7.7%) (31.7%)
ZapSibNeftekhim related debt 161,786 146,670 158,145 10.3% 2.3%
Cash and cash equivalents 70,143 66,164 172,083 6.0% (5 9 .2 %)
Bank deposits 3,158 3,213 - (1.7%) n/m
Net debt 292,818 298,607 285,066 (1.9%) 2.7%
Net debt excluding related to ZapSibNeftekhim 184,186 215,392 247,131 (14.4%) (25.5%)
ZapSibNeftekhim related net debt 108,632 83,215 37,935 30.5% 186.4%
Debt / EBITDA 2.7x 2.7x 3.4x
Net debt (4) / EBITDA (5) , including 2.2x 2.2x 2.1x
Net debt excluding related to ZapSibNeftekhim 1.4x 1.6x 1.8x
ZapSibNeftekhim related net debt 0.8x 0.6x 0.3x

Debt Maturity Profile

The following table presents scheduled maturities of our outstanding debt as of the dates indicated:

Debt Maturity Profile
RR millions, except as stated As of 30 September 2016 % of total borrowings As of 30 June 2016 % of total borrowings As of 31 December 2015 % of total borrowings Change, %
30 Sep 2016 vs 31 Dec 2015
Due for repayment:
Within one year 16,772 4.6% 43,106 11.7% 47,745 10.4% (64.9%)
Between one and two years 57,548 15.7% 70,738 19.2% 48,794 10.7% 17.9%
Between two and five years 146,268 40.0% 119,563 32.5% 212,286 46.4% (31.1%)
Between five and ten years 23,449 6.4% 16,723 4.5% 17,280 3.8% 35.7%
After ten years 122,081 33.3% 117,853 32.0% 131,044 28.7% (6.8%)
Total debt 366,118 100.0% 367,984 100.0% 457,149 100.0% (19.9%)
Debt Currency Structure
RR millions, except as stated As of 30 September 2016 % of total borrowings As of 30 June 2016 % of total borrowings As of 31 December 2015 % of total borrowings Change, %
Denominated in:
Russian rouble 97,860 26.7% 94,654 25.7% 131,097 28.7% (25.4%)
Euro 42,623 11.6% 24,909 6.8% 19,470 4.3% 118.9%
US Dollar 225,636 61.6% 248,422 67.5% 306,582 67.1% (26.4%)
Total debt 366,118 100.0% 367,984 100.0% 457,149 100.0% (19.9%)
  • Total debt : largely unchanged from 30 June 2016 and a 19.9% decrease vs. 31 December 2015 to RR 366,118million due to the repayment of debt denominated primarily in foreign currencies, as well as to Russian rouble appreciation as RR/USD rate decreased by 13.3% to 63.1581 as of 30 September 2016 from 72.8827 as of 31 December 2015.
  • Net debt: a 1.9% decrease to RR 292,858 million vs. 30 June 2016 due to higher cash balances and a 2.7% increase vs. 31 December 2015, as we substantially utilised sources provided by the National Wealth Fund for financing of ZapSibNeftekhim capital expenditures.
  • Credit lines: RR 234,350 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 132,225 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 2016 and supporting MD&A.

( [1] ) Including Gazprom Neft’s share in the processing / production volumes of Yuzhno-Priobskiy GPP starting September 2015.

( [2] ) Including fractionation volumes under processing arrangements.

( [3] ) Excluding Gazprom Neft’s share in the processing / production volumes of Yuzhno-Priobskiy GPP starting September 2015.

(1) Including Gazprom Neft’s share in the processing / production volumes of Yuzhno-Priobskiy GPP starting September 2015.

(2) Including fractionation volumes under processing arrangements.

(3) Excluding Gazprom Neft’s share in the processing / production volumes of Yuzhno-Priobskiy GPP starting September 2015.

(4) Net debt represents total debt less cash and cash equivalents and bank deposits.

(5) Unaudited data.