Moscow, 18 February 2020. PJSC SIBUR Holding, an integrated petrochemicals company, today publishes its operational and financial results for the fourth quarter and full year ended 31 December 2019 in accordance with International Financial Reporting Standards (IFRS).
Operational and financial highlights for FY 2019:
- The ZapSibNeftekhim (ZapSib) construction was completed ahead of schedule: key commissioning works completed, we have started test sales of polypropylene and test deliveries of polyethylene to customers.
- Market conditions remain challenging, with prices for petrochemical products falling against the backdrop of uncertainty caused by trade tensions between the US and China. Prices were also under pressure following the launch of new production facilities in the US and Asia. Liquefied petroleum gas (LPG) and naphtha prices are also declining, at a steeper pace than oil prices, mainly due to growth in LPG export volumes from the US.
- Revenue decreased by 6.6% on the back of negative dynamics in the Midstream and the Plastics, Elastomers & Intermediates segments. The decrease in overall revenue was partially offset by revenue growth in the Olefins & Polyolefins segment, driven by the start of test polypropylene sales from ZapSib.
- EBITDA decreased by 15.4% year-on-year to RUB 170 billion, primarily due to weaker results in the Midstream and the Plastics, Elastomers & Intermediates segments. This was partially offset by stronger results in the Olefins & Polyolefins segment.
- EBITDA in the Olefins & Polyolefins segment grew significantly, up 30% year-on-year to RUB 49 billion.
- Polypropylene sales volumes increased by 26.3% year-on-year.
- Elastomers sales volumes increased by 8.8% year-on-year.
- The EBITDA margin was 32.0%, remaining consistently high against the industry average.
- Net profit increased by 27.6% year-on-year to RUB 141.4 billion.
Dmitry Konov, Chairman of the Management Board of SIBUR Holding, said:
“Without a doubt, the most important event of the past year was the early completion of the construction of ZapSib, a large-scale and ambitious project that transforms the entire company enabling it to make products with higher added value and be less sensitive to fluctuations in energy prices. The dynamics of the global petrochemical industry in 2019 were accompanied by unstable and depressed prices for naphtha and LPG, a trend that we continue to see on the markets today. Already during the commissioning phase of ZapSib, SIBUR was able to increase sales of polypropylene and boost EBITDA in the Olefins and Polyolefins segment.
In 2019, SIBUR’s gas processing plants (GPPs) processed 22.6 billion cubic metres1 of associated petroleum gas (APG), an increase of 1.5% year-on-year. Raw NGL fractionation volumes remained at 2018 levels and amounted to 7.7 million tonnes1. LPG sales decreased by 4.0% to 5.1 million tonnes due to higher internal use of this raw material during the commissioning of ZapSib.
SIBUR increased sales volumes for most of its products year on year. Sales of polypropylene increased by 26.3% to 737 thousand tonnes following the start of test sales at ZapSib as well as shorter maintenance shutdown in Tomsk and Tobolsk. Polyethylene sales volumes were almost flat and amounted to 261 thousand tonnes. Sales of plastics and organic synthesis products also remained at the 2018 level and amounted to 793 thousand tonnes. Sales of elastomers grew by 8.8% to 529 thousand tonnes as a result of higher contractual obligations and change in inventory balances.
|3 months ended 31 December||Change||Year ended 31 December||Change|
|Thousand tonnes, except as stated||2019||2018||%||2019||2018||%|
|Processing and production volumes|
|APG processing, SIBUR’s share2 (million cubic metres)||5 872||5 834||0,6%||22 617||22 283||1,5%|
|Raw NGL fractionation, SIBUR’s share1||2 040||2 035||0,2%||7 739||7 712||0,3%|
Products in the petrochemicals segments, including:
|Plastics and organic synthesis products||185||203||(9.0%)||793||800||(0.8%)|
|Intermediates and other chemicals||190||130||46.9%||542||483||12.1%|
|Products in the Midstream segment, including:||1,390||1,786||(22.2%)||6,317||6,402||(1.3%)|
In 2019, our revenue decreased by 6.6% year-on-year to RUB 531.3 billion, with the following dynamics across business segments:
- Olefins & Polyolefins revenue increased by 4.8% to RUB 105.7 billion. This was largely attributable to the start of PP production at ZapSib, partially offset by negative dynamics of the international benchmarks .
- Plastics, Elastomers & Intermediates revenue decreased by 10.6% to RUB 152.8 billion, mainly due to average selling prices decline for all products groups.
- Midstream revenue decreased by 11.5% to RUB 213.0 billion on the back of lower LPG and naphtha prices.
EBITDA decreased by 15.4% to RUB 170 billion driven by weak performance of Midstream and the Plastics, Elastomers & Intermediates segments. This decline was partially offset by EBITDA growth in the Olefins & Polyolefins segment, due to lower prices for raw materials (LPG) and increased sales of polypropylene.
Net profit increased by 27.6% to RUB 141.4 billion, largely due to revaluation of the Company’s FX-denominated debt.
|3 months ended 31 December||Change||Year ended 31 December||Change|
|RUB millions, except as stated||2019||2018||%||2019||2018||%|
|Revenue (net of VAT and export duties), including:||135,946||154,631||(12.1%)||531,306||568,647||(6.6%)|
|Olefins & Polyolefins||27,806||25,970||7.1%||105,717||100,862||4.8%|
|Plastics, Elastomers & Intermediates||35,683||46,221||(22.8%)||152,805||171,003||(10.6%)|
|EBITDA margin, %||32.3%||32.9%||32.0%||35.3%|
|Net cash from operating activities||36,044||33,595||7.3%||124,468||160,409||(22.4%)|
|Net cash used in investing activities, including:||(25,682)||(30,401)||(15.5%)||(125,555)||(133,286)||(5.8%)|
As of 31 December 2019, total debt amounted to RUB 379.7 billion, an increase of 14.2% from 31 December 2018. The increase was driven by drawdown of credit facilities for ZapSib funding, and Group’s adoption of IFRS 16 from 1 January 2019.
Net debt3 as of 31 December 2019 increased by 14.1% compared to 31 December 2018 and amounted to RUB 362.3 billion.
The net debt to EBITDA ratio as of 31 December 2019 was 2.1x, compared to 1.6x as of 31 December 2018.
|RUB millions, except as stated||As of 31 December 2019 2019||As of 31 December 2018||Change|
|Debt excluding related to ZapSib||116,213||86,637||34.1%|
|Cash and cash equivalents||17,443||14,783||18.0%|
|Net debt excluding related to ZapSib||119,390||74,770||59.7%|
|ZapSib-related net debt||242,906||242,858||n/m|
The full version of the Consolidated Audited Financial Information as of and for the 12 months ended 31 December 2019 in accordance with IFRS is available on our website at http://investors.sibur.com/results-centre/financial-results.aspx?sc_lang=en.
SIBUR is the leader of the Russian petrochemical industry and one of the largest companies globally in this sector, with more than 23,000 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 2019, SIBUR processed 22.6 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 2019, SIBUR reported revenue of USD 8.2 billion and EBITDA of USD 2.6 billion. Over the past 10 years, SIBUR has implemented a number of large-scale investment projects worth more than RUB 1 trillion. Each year, the Company spends no less than 70% of its EBITDA to finance its investment programme, while maintaining a balanced debt burden.
(1) Excluding third-party volumes processed at SIBUR’s capacities
(2) Including volumes processed at third-party capacities and excluding third-party volumes processed at SIBUR’s capacities.
(3) Net debt is calculated as total debt excluding cash and cash equivalents.