SIBUR reports Q4 and FY 2019 IFRS results

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.

Operating results

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.


Operating results


  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%   
             
Sales volumes            
Products in the petrochemicals segments, including:
1,000 931 7.4% 3,767 3,686 2.2%
Polypropylene 222 131 70.1% 737 583 26.3%
Polyethylene (LDPE) 64 69 (6.4%) 261 262 (0.6%)
Elastomers 134 122 9.7% 529 486 8.8%
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%)
LPG 1,134 1,464 (22.5%) 5,145 5,357 (4.0%)
Naphtha 256 322 (20.6%) 1,172 1,045 12.2%

Financial results

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.

Financial results

  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%)
Midstream 50,437 66,768 (24.5%) 213,030 240,818 (11.5%)
EBITDA 43,863 50,853 (13.8%) 170,020 201,007 (15.4%)
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%)
Capital expenditures2 (50,184) (46,489) 7.9% (150,378) (151,438) (0.7%)

Borrowings

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.

Borrowings

RUB millions, except as stated As of 31 December 2019 2019 As of 31 December 2018 Change
Total debt 379,739 332,411 14.2%
Debt excluding related to ZapSib 116,213 86,637 34.1%
ZapSib-related debt 248,202 245,774 1.0%
Lease liabilities 15,324 - n/m
Cash and cash equivalents 17,443 14,783 18.0%
Net debt 362,296 317,628 14.1%
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.

About SIBUR

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.

International Media Relations
  • Anna Lebed
  • Tel.: +7 (495) 937-17-26
    Fax: +7 (495) 777-55-00
  • E-mail: LebedAI@sibur.ru
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