SIBUR announces limited operational update for 9 months 2017

9 November 2017

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 nine months ended 30 September 2017.

KEY HIGHLIGHTS

  • Total revenue increased by 8.7% year-on-year;
  • Associated petroleum gas (APG) processing volumes remained largely flat(1) year-on-year;
  • Natural gas production volumes remained largely flat (1) year-on-year;
  • Raw natural gas liquids (raw NGL) fractionation volumes increased by 7.3%(2) year-on-year;
  • LPG production volumes increased by 4.0% year-on-year;
  • PP & PE sales volumes increased by 16.6% year-on-year;
  • Elastomers sales volumes increased by 7.7% year-on-year.



  Nine months ended 30 September Change,  %
  2017 2016
       
Revenue (RR millions)      
Total external revenue 326,259
300,243
8.7%
Feedstock & Energy 127,529
123,218
3.5%
Olefins & Polyolefins 64,350
62,474
(3.0%)
Plastics, Elastomers & Intermediates 110,161
98,384
12.0%
Unallocated 24,219
16,167
49.8%
       
       
Processing and production volumes ( thousand tonnes, except as stated)                                              
       
APG processing (1) (million cubic metres) 16,862
16,812
(0.3%)
APG processing, SIBUR's share (3) (million cubic metres) 16,489
16,458
(0.2%)
       
Natural gas production (1) (million cubic metres) 14,613
14,571
(0.3%)
Natural gas production, SIBUR's share (3) (million cubic metres) 14,330
14,298
(0.2%)
       
Raw NGL fractionation (2) 6,392 5,960
7.3%
Raw NGL fractionation, SIBUR’s share 5,492
5,329
3.1%
       
Sales volumes ( thousand tonnes, except as stated)      
Natural gas (million cubic metres) 13,678
13,685
(0.1%)
LPG 3,542 3,488 (1.6%)
Naphtha 669 993 (32.6%)
Petrochemical products, including 2,695 2,517 7.1%
Polyolefins (PP, PE, BOPP-films) 573 663 13.7%
Elastomers 361 335 7.7%
Plastics and organic synthesis products 583 588 (0.9%)
MTBE and fuel additives 501 491 (2.0%)
       

OPERATIONAL HIGHLIGHTS

External Revenue

In the nine months ended 30 September 2017, our revenue increased by 8.7% to RR 326,259 million on higher revenue across all segments.

  • Feedstock & Energy: external segment revenue increased by 3.5% to RR 127,529 million on positive dynamics of international benchmarks for liquids largely offset by Russian rouble appreciation and lower external sales volumes of liquids, which was attributable to the lower raw NGL purchases and higher internal use as petrochemicals feedstock at our crackers.
  • Olefins & Polyolefins: external segment revenue increased by 3.0% to RR 64,350 million primarily due to higher polyolefin revenues on higher sales volumes partially negated by lower selling prices. Increase in polyolefin sales volumes was mainly driven by higher capacity utilisation, as well as lower inventory accumulation. This was substantially offset by decrease in BOPP-films revenues on (i) lower selling prices, as positive dynamics in international market prices was fully negated by the Russian rouble appreciation, (ii) lower spreads between BOPP and PP that drive export prices, and (iii) higher share of contract sales on highly competitive export markets.
  • Plastics, Elastomers & Intermediates: external segment revenue increased by 12.0% to RR 110,161 million largely due to the highly favorable market environment for elastomers in the first half of 2017, as well as higher sales of intermediates and other chemicals.
  • Unallocated revenue increased by 49.8% to RR 24,219 million, which was driven by higher revenue from NIPIGAZ services and sales of power following the acquisition of Tobolsk Heating and Power Plant in February 2016.

 

Key Feedstock Purchases

  Nine months ended 30 September     Change, 
%
RR millions, except as stated   2017 2016
       
NGLs 23,864
17,351
37.5%
APG 19,070
16,662
14.5%
Paraxylene 5,079
5,152 (1.4%)


In the nine months ended 30 September 2017, we observed an increase in our expenses related to hydrocarbon feedstock purchases. This was mainly attributable to higher feedstock purchase prices despite lower purchasing volumes for NGLs and flat APG purchasing volumes.

  • NGLs: purchasing expenses increased by 37.5% to RR 23,864 million despite lower purchasing volumes due to the increase in average purchase price by RR 4,121 per tonne (61.3%) largely on higher international benchmarks for liquids resulted in the respective export netbacks dynamics, which was only partially compensated by Russian rouble appreciation.
  •  APG: purchasing expenses increased by 14.5% to RR 19,070 million due to the increase in average purchase price by RR 144 per bcm (14.2%) on higher international benchmarks for liquids, while purchasing volumes were almost flat.
  • Paraxylene: purchasing expenses decreased by 1.4% to RR 5,079 million due to lower average purchase price despite higher purchasing volumes.


Capital Expenditures


The following table presents data on financing of our key investment projects for the nine months ended

30 September 2017 and 2016:

RR millions, except as stated Nine months ended 30 September     Completion
Location Description 2017 2016  
Tobolsk ZapSibNeftekhim 68,780
96,698
2019
Tobolsk / Kaluga region Logistic hub for polymers distribution 5,136
929
2019
 Perm New DOTP production 312 273 2019


The decrease in ZapSibNeftekhim financing was attributable to substantial advances paid in the first quarter of 2016 ahead of equipment deliveries under contract terms and shifts in payment schedule with our EP-contractors in 2017.


Borrowings

Total Debt and Net Debt

RR millions, except as stated As of 
30 September 2017      
 As of 
30 June 2017 
As of 
31 December 2016  
 Changе, %
30 Sep 2017
vs 30 Jun 2017
Changе, %  
30 Sep 2017 
vs 31 Dec 2016     
           
Total debt 299,995     302,399 341,813      (0.8%) (12.2%)
Debt excluding related to ZapSibNeftekhim 133,745     134,693 182,128      (0.7%) (26.6%)
ZapSibNeftekhim related debt 166,250     167,706 159,68 5      (0.9%) (4.1%)
Cash and cash equivalents 45,657     41,216 60,635      10.8% (24.7%)
Net debt 254,338     261,183 281,178      2.6% (9.5%)
Net debt excluding related to ZapSibNeftekhim   103,247     118,989 163,369      13.2% (36.8%)
ZapSibNeftekhim related net debt 151,091     142,194 117,809      6.3% (28.3%)
           
Debt / EBITDA 2.0x      2.0x 2.4x    
Net debt (4) / EBITDA (5) , including 1.7x      1.7x 2.0x    
Net debt excluding related to ZapSibNeftekhim   0.7x      0.8x 1.2x    
ZapSibNeftekhim related net debt 1.0x      0.9x 0.8x    
Net debt / EBITDA (in USD) 1.7x      1.8x 2.2x    

 

Debt Maturity Profile

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

RR millions, except as stated   As of 30 September 2017   % of total borrowings     As of 30 June 2017      % of total borrowings As of 31 December 2016   % of total borrowings    Change, %   
               
Due for repayment:              
Within one year 38,711 12.9%      39,594      13.1% 22,188 6.5% 74.5%
Between one and two years 32,879 11.0%      7,456      2.5% 41,580 12.2% (20.9%)
Between two and five years 68,088 22.7%      115,522      38.2% 135,411 39.6% (49.7%)
Between five and ten years 46,914 15.6%      24,764      8.2% 25,540 7.5% (83.7%)
After ten years 113,404 37.8%      115,062      38.0% 117,094 34.3% (3.2%)
Total debt 299,995 100.0%      302,397      100.0% 341,813 100.0% (12.2%)

 

Debt Currency Structure

RR millions, except as stated    As of 30 September 2017     % of total borrowings As of 30 June 2017   % of total borrowings    As of 31 December 2016   % of total borrowings    Change, %   
               
Denominated in:              
Russian rouble      74,851      25.0% 74,432 24.6% 97,690 28,6% (23.4%)
Euro      56,450      18.8% 56,168 18.6% 45,156 13.2% (25.0%)
US Dollar      168,694      56.2% 171,799 56.8% 198,967 58.2% (15.2%)
Total debt      299,995      100.0% 302,399 100.0% 341,813 100.0% (12.2%)

  • Total debt: a 12.2% decrease vs. 31 December 2016 to RR 299,995 million was mainly attributable to substantial repayment of conventional debt, partially offset by new drawdowns from ECA-backed credit facilities for ZapSibNeftekhim funding.
  • Net debt: a 9.5% decrease vs. 31 December 2016 to RR 254,338 million on the back of decreasing total debt and financing of ZapSibNeftekhim capital expenditures from the additional cash balances mobilised from AO Uralorgsintez divestment.
  • Credit lines: RR 236,159 million was available as of 30 September 2017 under existing credit facilities denominated in Russian roubles, US dollars and euros, both short- and long-term, of which an equivalent of RR 122,230 million was committe.


The published data may be revised when we publish the IFRS unaudited consolidated interim condensed financial information for the first half of 2017 and supporting MD&A.


(1) Including JVs’ share in the processing / production volumes.

(2) Including fractionation volumes under processing arrangements.

(3) Excluding JVs’ share in the processing / production volumes.

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

(5) Unaudited data.


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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