Департамент торговых идей

Yesterday Centerra Gold announced new terms for a strategic agreement with the Kyrgyz government previously concluded on September 11, 2017. 

According to the KTO’s press release dated yesterday, Antimonopoly Committee approved a temporary compensatory tariff for crude oil transportation to the domestic market.

On Friday, Chevron reported results for 1H2019, including profit in 2Q2019 of $740mn received as a commission for the termination of the merger with Anadarko and a non-cash tax relief of $180mn, received in connection with the reduction of the corporate income tax rate in Alberta (Canada).

According to RAS financial statements, Aeroflot’s revenue for 1H2019 amounted to 252 863 RUB (+ 15,4% y/y) and cost of sales amounted to 269 355 mn RUB (+ 17.9% y/y). General, selling and administrative expenses increased by 10.2% y/y to RUB 22,622 mn. The net loss of the Group reached RUB 14,120 mn (+ 96.6% y/y).

The volume of uranium production (on a attributable basis) in 1H2019 amounted to 6.2ths tons, exceeding the figure of 1H2018 by 8%. At the same time, sales of uranium decreased by 3% yoy to 5.4ths tons, but in general it goes according to the plan for 2019. The average selling price of U3O8 in 1H2019 strengthened by 15%, reaching $27.43/lb, which is partly a consequence of the increase in the average spot price at the end of June by 19% yoy.

Inflation in July remained at the level of the previous month at 0.2%б in annual terms, it also stayed unchanged at 5.4%. Foodstuffs confidently retain their place as a key driver in price increases. The overall price index has also overtaken last year’s level at 2.8% and this despite the decline and freezing of utility tariffs and the regulation of fuel prices. Prices for non-food products continue to ignore the weakening of the national currency, so, against the US dollar, the tenge weakened by 13% yoy for 7M2019 and 3% from the beginning of the year, against the ruble in the same period, the weakening was 6% yoy and 9%, respectively.

We confirm our recommendation to Buy Polymetal’s shares with 12M TP 1,131 GBp per share: the value of gold exceeded the maximum five-year level, increasing by 12% for the last 3 months. We believe that the uptrend in precious metal prices will continue to be stimulated by the increase of gold reserves of central banks, the preservation of geopolitical tensions, the easing of the monetary policy of the US Federal Reserve and the slowdown in world economic growth. In addition, in the 1H2019 the Company exceeded the planned indicators at the Kyzyl field in Kazakhstan and showed stable results on current mines, which does not exclude the possibility of over-fulfillment of the announced production plans for the year.

Following the results of 6M2019, the Company generated revenue of 674.5 mn USD (+ 41% y/y) with adjusted net profit of 83.8 mn USD (+ 484% y/y). Average consolidated sales prices for gold and copper in 1H2019 increased to 1,233USD /oz (+ 1% y/y) and to 4,740 USD/ton (-3.6% y/y)  respectively. The All-In Sustaining costs (AISC) of the Company for 1H2019, excluding taxes, amounted to 693 USD/oz (-28% y/y).

We raise our recommendation on Cameco shares from Hold to Buy: after the publication of 1H2019 results price correction contributes to an increase of the premium to our 12M TP to 22%. Keeping our assumptions about strong long-term growth catalysts in the form of the demand for nuclear energy from China and Cameco's leading positions in the highly concentrated market of uranium producers, we believe that lowering the stock price provides a good opportunity to buy. We maintain our 12M TP of CAD14.9/share, noting the absence of significant changes in our forecasts.

Following 1H2019, the Сompany increased revenue by 0.5% y/y  to 73 049 mn KZT, EBITDA excluding non-recurring costs amounted to 30 040 mn KZT (+ 29.1% y/y), while EBITDA margin amounted to  41.1% (32% in 1H2018). During the reporting period, Kcell’s operating loss amounted to KZT 2 083 mn, net profit was negative and amounted to KZT 5 881 mn (versus net profit of 3 477 mn KZT in 1H2018) due to the recognition of a penalty of KZT 14 552 mn, which was recorded as a one-time expense. Net financing costs rose by 14.5% to KZT 4 838 mn. Subscriber base at the end of 1H2019 amounted to 8 676 versus 10 062 at the end of 1H2018.