SIBUR reports Q1 2014 IFRS results

External sales of NGLs, including liquefied petroleum gases (LPG), naphtha and raw NGL, rose 40.5% year-on-year to 1.5 million tonnes. Natural gas sales volumes decreased by 17.8% year-on-year to 2.9 billion cubic metres. Sales volumes of petrochemical products totaled 496.4 thousand tonnes, a decrease of 6.2% year-on-year.

In the first quarter of 2014, revenue increased by 20.9% to RR 80,002 million compared to RR 66,184 million in the first quarter of 2013. Our energy product group delivered strong performance on higher sales volumes. Our revenue from sales of energy products increased by 42.4% year-on-year to RR 49,622 million from RR 34,846 million in 2013. SIBUR substantially expanded its trading activities for LPG and naphtha with the launch of Ust-Luga transshipment facility. In the first quarter of 2014, our revenue from sales of basic polymers increased by 47.8% year-on-year to RR 7,396 million from RR 5,004 million in the first quarter of 2013. The increase was primarily attributable to higher PP sales volumes following the launch of Tobolsk-Polymer plant the second half of 2013.

This was partially offset by declining revenue from sales of synthetic rubbers, intermediates & other chemicals and processing services. Our synthetic rubber business remained under significant pressure on the back of persistent market price correction for our synthetic rubber grades. An unscheduled shutdown at our steam cracker in Kstovo resulted in a decrease in production of certain intermediates and the respective decline in revenue from sales of intermediates & other chemicals. Following the deconsolidation of OOO Yugragazpererabotka as of 12 March 2013, we did not consolidate its revenue until March 2014, when we gained full control over OOO Yugragazpererabotka, which resulted in a decrease in sales of processing services in the first quarter of 2014(4).

EBITDA for the period amounted to RR 22,569 million, a year-on-year growth by 10.1% from RR 20,505 million in the first quarter of 2013. Our EBITDA margin totaled 28.2% compared to 31.0% reported a year earlier. The year-on-year increase in EBITDA was primarily attributable to the completion of large-scale investment projects, such as Tobolsk-Polymer plant, the biggest polypropylene production facility in Russia. The EBITDA was positively affected by the foreign exchange rate fluctuations.

Profit for the first quarter of 2014 increased four times to RR 56,774 million from RR 15,634 million a year earlier. The increase was primarily attributable to non-cash gain on consolidation of Yugragazpererabotka and the revaluation of SIBUR’s share in the JV accounted for at historical cost before the transaction.

In the first quarter of 2014, our capital expenditures decreased by 36.4% to RR 13,682 million in the first quarter of 2014 from RR 21,507 million a year earlier, resulting from completion of several large-scale projects in feedstock & energy and petrochemicals segments.

In the first quarter of 2014, SIBUR made a payment of the first tranche for the acquisition of RN-Holding’s 49% stake in OOO Yugragazpererabotka in the amount of RR 20,547 million.