SIBUR Holding's nine month revenue remains flat

Operational Results

For the first nine months of 2013, SIBUR’s gas processing plants (GPPs), including GPPs operated by OOO Yugragazpererabotka, processed 14.5 billion cubic metres of associated petroleum gas (APG)(1)), an increase of 5.8% year-on-year. As a result, production of natural gas(2) rose 4.6% year-on-year to 12.5 billion cubic metres(1). Raw natural gas liquid (raw NGL) production increased by 15.3% year-on-year to 3.9 million tonnes(1)

For the first nine months of 2013, SIBUR increased sales volumes of the majority of its energy products primarily due to increased hydrocarbon feedstock processing. Natural gas sales volumes rose by 16.5% year-on-year to 8.9 billion cubic metres. External sales of natural gas liquids (NGLs), including liquefied petroleum gases (LPG), naphtha and raw NGL, rose 20.1% year-on-year to 3.5 million tonnes. Sales volumes of petrochemical products totaled 1.6 million tonnes, a decrease of 5% year-on-year.

Financial Results

For the nine months ended 30 September 2013 SIBUR’s revenue remained largely flat at RR 197,598 million compared to RR 198,957 million for the nine months ended 30 September 2012. The Company’s energy product group delivered strong performance on higher sales volumes. Improved performance of our plastics & organic synthesis products group was supported by production growth following the commercial launch of the second production line of expandable polystyrene in Perm and consolidation of the BIAXPLEN Group, both completed in 2012, as well as favourable price environments for certain products.

This was offset by lower revenue from sales of synthetic rubbers, intermediates & other chemicals, processing services, trading and other sales. Our synthetic rubber business remained under significant pressure due to weak demand in our key markets and continued price correction for the majority of our synthetic rubber grades. The decline in revenue from sales of intermediates & other chemicals was primarily attributable to decommissioning of an outdated chlorine and caustic soda production facility Caprolactam completed in April 2013.

Lower revenue from other sales was attributable to discontinuation of trading activities in favour of the mineral fertilisers business, which was divested by SIBUR at the end of 2011. Additionally, following the deconsolidation of OOO Yugragazpererabotka (SIBUR’s joint venture with RN Holding(4)) starting from Q2 2013 the JV’s gas processing revenue is no longer included in SIBUR’’s results.

The Group’s EBITDA for the nine months ended 30 September 2013 amounted to RR 56,985 million, down by 5.4% year-on-year from RR 60,240 million for the corresponding period of 2012. The EBITDA margin totaled 28.8% compared to 30.3% reported in the corresponding period of 2012. The year-on-year decrease in EBITDA and EBITDA margin was primarily attributable to tighter margins between feedstock and end-product prices in the petrochemical segment, particularly in the synthetic rubber product group.

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SIBUR Holding