SIBUR reports Q1 2021 IFRS results

Moscow, 29 April 2021. 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 three months ended 31 March 2021 in accordance with International Financial Reporting Standards (IFRS).

Highlights for Q1 2021:

• Revenue of RUB 173 bln, up 12.8% quarter-on-quarter
• EBITDA of RUB 74 bln, up 28.6% quarter-on-quarter
• Adjusted profit net of FX of RUB 45 bln, up 83.6% quarter-on-quarter
• EBITDA margin of 42.4%
• Net debt decreased by 12.5% compared to 31 December 2020; net debt to EBITDA ratio in RUB terms decreased from 2.3х to 1.6х

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:

“Our results for the first quarter of 2021 confirm that SIBUR has chosen the right long term development strategy, focusing on unlocking the potential of our new projects and gradually expanding our petrochemical business, which is demonstrating exceptional growth. As our new facilities reached design capacities, we were able to increase the share of sales of petrochemical products, which, together with higher prices observed in the quarter, drove the increases SIBUR’s EBITDA and EBITDA margin, which reached 42.4%.

“The Company’s results were supported by a favourable market environment amid the partial lifting of lockdown restrictions and the gradual recovery of the global economy. The increase in prices was also driven by a temporary supply and demand mismatch resulting from the shutdown of a number of US facilities amid heavy snowstorms in the two biggest oil refining states.

“Compared to last year, when the petrochemical sector was first hit by the pandemic, today the industry is demonstrating robust growth, consistently outpacing growth in the global economy.

“Thanks to the combination of these two factors – a favourable macro environment and the implementation of initiatives aimed at expanding the Company’s petrochemical business – the share of petrochemicals in SIBUR’s EBITDA structure reached a record 65.6%.

“Strong first-quarter results provided us with additional liquidity which we used to make early debt repayments. As a result, SIBUR’s net debt decreased by 12.5% compared to the end of 2020. The net debt to EBITDA ratio in RUB terms decreased to 1.6x from 2.3x at the end of 2020.

“In terms of operations during the ongoing COVID-19 pandemic, all our facilities were operating as normal as of the end of the reporting period, as opposed to the shift-camp work model that was introduced in 2020. Nevertheless, we continue monitoring the public health situation, and as our results over the past twelve months have demonstrated, we are ready to adapt as necessary.”

Financial results

In Q1 2021, revenue increased by 12.8% to RUB 173.4 billion, up from RUB 153.7 billion a quarter earlier, as a result of the following trends across business segments:

• Revenue in the Olefins & Polyolefins segment increased by 27.7% quarter-on-quarter to RUB 74.1 billion. This growth was largely attributable to an increase in sales of polypropylene and polyethylene as a result of increased production at ZapSibNeftekhim, as well as to a rise in prices for these products.
• Revenue in the Plastics, Elastomers & Intermediates segment increased by 17.0% to RUB 42 billion, mainly as a result of positive ruble pricing dynamics across all product groups.
• Revenue in the Midstream segment increased by 10.9% to RUB 44.1 billion, mainly due to an increase in prices for LPG and naphtha and despite an increase in internal sales to Zapsib

In Q1 2021, operating expenses slightly increased quarter-on-quarter to RUB 115.6 billion from RUB 113.9 billion. This result was driven mainly by an increase in feedstock expenses amid higher purchasing volumes of raw NGL and naphtha and higher prices. These expenses were partially offset by a decline in expenses associated with third-party services and maintenance.

Capital expenditures decreased by 22.4% quarter-on-quarter to RUB 25.3 billion.

Operating results

In Q1 2021, SIBUR’s gas processing plants processed 4.8 billion cubic metres of APG, down 5.9% quarter-on-quarter, amid a decrease in associated petroleum gas (APG) supplies following the extension of the OPEC+ agreement and colder weather conditions in West Siberia. At the same time, raw NGL fractionation volumes remained nearly unchanged from Q4 2020 at 2 million tonnes. External LPG sales decreased by 11.9% to 669 thousand tonnes due to an increase in internal consumption as ZapSibNeftekhim reached its design capacity.

SIBUR increased sales of most of its petrochemical products compared with Q4 2020. Polypropylene sales increased by 10.3% to 321 thousand tonnes, and polyethylene sales increased by 11% to 434 thousand tonnesSales of plastics and organic synthesis products slightly decreased from 209 thousand tonnes in Q4 2020 to 203 thousand tonnes. Sales of elastomers remained unchanged from the previous quarter at 109 thousand tonnes.

Borrowings

As of 31 March 2021, the Company’s total debt amounted to RUB 406.1 billion, down 5.6% compared to 31 December 2020. The decrease was due above all to early repayment of part of the Company’s debt that was used to finance the construction of ZapSibNeftekhim, as well as due to the slight appreciation of the Russian ruble against the euro.

As of 31 March 2021, SIBUR’s net debt had decreased by 12.5% to RUB 353 billion compared to 403.2 billion at 31 December 2020.

The net debt/EBITDA ratio as of 31 March 2021 was 1.6x in both RUB and USD terms.

Results by segment

Olefins & Polyolefins

¹Including inter-segment transfers

In Q1 2021, EBITDA in the Olefins & Polyolefins segment reached RUB 36.5 billion, up 29.3% quarter-on-quarter and up 232.9% year-on-year. This growth was mainly due to an increase in polypropylene and polyethylene production volumes at ZapSibNeftekhim and positive price dynamics in the segment.

The segment’s EBITDA margin increased by 0.8 p.p. quarter-on-quarter to 42.7%.

The production of olefins and polyolefins increased by 2.5% quarter-on-quarter, as ZapSibNeftekhim reached its design capacity utilisation rate, thanks to which the production of polyethylene and polypropylene increased by 5.5% and 4.7%, respectively.

External sales of olefins and polyolefins rose 9.1% to 844.5 thousand tonnes quarter-on-quarter due to increased production volumes and sales of existing stockpiles from ZapSibNeftekhim.. Domestic sales increased by 51.4% year-on-year and amounted to 380.5 thousand tonnes.

Plastics, Elastomers & Intermediates

¹Including inter-segment transfers, ²plastics and organic synthesis products, ³intermediates and other chemicals

In Q1 2021, the PE&I segment’s EBITDA reached RUB 11.7 billion, 41% higher than in Q4 2020 and more than five times higher than a year earlier. This was due, above all, to positive dynamics in prices for elastomers, MEG and EPS in the first quarter and despite an increase in feedstock prices for these products.

The segment’s EBITDA margin increased by 4.2 p.p. to 26.4% quarter-on-quarter, due above all to an increase in product margins.

External sales of plastics, elastomers and intermediates decreased by 9%. Domestic sales increased by 10.5% year-on-year to 424.6 thousand tonnes.

Midstream

¹Including inter-segment transfers, ²SIBUR’s share

The Midstream segment’s EBITDA increased by 29.1% quarter-on-quarter to RUB 28.7 billion, primarily due to positive price dynamics for LPG and naphtha amid rising oil prices. As a result, the segment’s EBITDA margin was 39.5%, up 4.3 p.p. quarter-on-quarter.

The full version of the Consolidated Audited Financial Information as of and for the three months ended 31 March 2021 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 largest integrated petrochemicals company in Russia and one of the fastest- growing companies in the global petrochemicals industry, with more than 23,000 employees, including 5,000 NIPIGAS 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 100 countries worldwide.

SIBUR helps to reduce CO2 emissions stemming from the burning of oil extraction by- products.

In 2020, SIBUR’s reported revenue of USD 7.2 billion and EBITDA of USD 2.5 billion. Over the past 10 years, SIBUR has implemented a number of large-scale investment projects worth about RUB 1 trillion.