Департамент торговых идей

Following the 2018 results, KAP reported on revenue growth by 58% yoy to 437bn tenge, which was a result of uranium sales growth by 65% ​​yoy to 16.6ths tons and sales price increases in currency by 1% and in tenge by 7% yoy. The average selling price in 2018 was T21 930/kg ($24.46/lb), showing an increase of 8% yoy.

In 2018 KTO's consolidated revenue amounted to T225bn, which is slightly higher than revenue for 2017 (+ 1.3%) due to an increase in revenues from oil transportation by 3% to T190bn. Revenue on separately basis amounted to T213bn, which is 2% higher than in 2017.

According to the IFRS results announced by Aeroflot for 2018, the revenue of the Company for 2018 was 611.6bn RUB (+14,8% y/y), EBITDA, including customs duties, decreased to 33.6bn RUB (-40% y/y). EBITDA margin declined from 10.5% to 5.5%, net income of the Company decreased to 5.7bn RUB (-75% y/y). In case the Company distributes 50% of net profit for 2018 for dividend payments, which is our base-case assumption, the amount of shareholder dividends will be 2.57 RUB/share.

The 2018 results are in line with our expectations: revenues amounted to 8,036bn rubles, an increase of 35% yoy; operating profit was 7712bn rubles, up 52% ​​yoy; net profit amounted to 619.2bn rubles, which is 48% more compared to 2017. Considering the expectedly strong results of the company, we still expect high probability of increasing dividend attractiveness

Inflation rate in February fell to 0.3% compared with 0.5% in January and 0.7% in December 2018. Annualized rate of growth declined to 4.8% from 5.2% in January. Main contribution to slowing in the growth of prices have come from tariffs of state monopolies, which administratively reduced since the beginning of the year.

For 2018 the Company’s revenue amounted to 1 129.3mn USD (-6% y/y), the operating profit decreased to 98.6mn USD (-61.9% y/y) with the net income of 107.5mn USD (-48.7% y/y). The decline in revenue in 2018 occurred mainly due to the decline in gold and copper sales as well as reduced average prices for realized metals in 2018, which were partially offset by an increase in molybdenum sales by 42% y/y in 2018 compared to 2017.

Noting the strong results of Gazprom Neft over the past year and the company's ambitious plans for the current one, we made changes to the valuation of the shares. We see good growth potential in oil production, justified by the expected decrease in restrictive measures by OPEC + participants and the company's readiness to increase production, which is due to the adequacy of resources and the intention to reach 100mn tons of oil production by 2020. According to our forecasts, a more than twofold increase in free cash flows, largely achieved due to an increase in oil prices, will also be supported by increased production. Current oil prices exceed the baseline optimal for the company at $60/bbl, which brings more optimism in forecasting revenue. Owing to a 49% yoy growth in profit, we expect a dividend of 30rub/share for the last year, and we expect SIBN RX to grow in the short term. We are raising our 12M target price from 347rub/share to 416rub/share and raising our recommendation on Gazprom Neft shares from Hold to Buy.

The company demonstrated strong financial results for 2018, which are within our expectations. A significant increase in production (+14% y/y) in combination with an increase in copper prices compared to 2017 (+6% y/y) contributed to increase in revenue to USD 2 162 mn (+30% y/y) in comparison with 2017, EBITDA to USD 1 310 mn USD (+26% y/y), operating profit to USD 851 mn (+19% y/y) and net profit to USD 510mn (+14% y/y). 

STEI indicator in January of the current year was at the level of 2.9% y / y, which is lower than the metrics for 2017 (3.8% y / y) and 2018 (4.7% y / y) for the same period. The contribution of the commodity sector to STEI, taking into account the transportation and sales of products of the commodity sector, was 1.95pp, which is about 67% of growth. All components of STEI in the context of monthly dynamics (January 2019 / December 2018) showed a negative growth.

On February 18, 2019, the National Bank starts holding deposit auctions with a return period of 7 days and terminates holding auctions on short-term 7-day notes. Also, with the launch of the deposit auction, 7-day deposits will be discontinued as part of the permanent access operations. A deposit auction will be the main instrument of open market monetary policy for liquidity withdrawals. According to the press release of the NBRK, these changes are aimed at increasing the efficiency of the interest rate channel of the transmission mechanism of monetary policy.