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Transneft Management Meets with Investors and Analysts

Date of publication: 11 June 2019 Printable version

First Vice President of Transneft Maxim Grishanin and Vice President Rashid Sharipov have taken part in the meeting with investors and analysts on the results of publishing the Company’s financial statements under IFRS for the first quarter of 2019. During the meeting they answered questions about the Company’s operations.

Dividends

Transneft may pay out dividends for 2018 in the amount of RUB 10,400 per share, which is 50% of the normalised net profits under IFRS for the previous year, said Vice President Rashid Sharipov.

“The decision must be made at the shareholders’ meeting to be held towards the end of June. We anticipate some RUB 10,400 per share, which will mean 50% of the normalised profits for 2018,” he said.

Mr. Sharipov informed that in accordance with the relevant policy, net profits for dividend payout are adjusted for nonmonetary and non-recurring items. In 2018 these included three main items: ca. RUB 23 billion as the foreign exchange adjustment, ca. RUB 25 billion for reassessment in the wake of buying a stake in NCSP and RUB 14 billion as recognition of the revenues on pension payments. “These are the three main items. There are some smaller items for which profit normalisation was done,” he said.

Pumping Plan

Transneft is not changing its oil pumping plan for 2019 because of the situation with the Druzhba pipeline, said Mr. Sharipov.

“As per the data for January through May of 2019, the Company has transported 198 million tonnes of crude, as compared to 195.7 million tonnes in January through May of 2018. During the same period, oil loading in ports increased by 6.5 million tonnes. Today we do not enter any changes into the plans for 2019 in view of underload”, said Vice President.

The Druzhba Pipeline Operation

According to Mr. Sharipov, it will take a few months for the load of the Druzhba OTP to recover to previous levels. “As for the load of the Druzhba, we hope to get back to standard levels during the next 2-3 months,” said Sharipov.

First Vice President of the Company Maxim Grishanin said, “We do not expect the retrieval of oil from Belarus to affect our financial reporting in any meaningful way.”

Until mid-July the Company will have settled the issue of handling the reversed contaminated oil from the Druzhba pipeline.

Transneft is working out various options of handling this reverse flow.  This work is yet to be completed. As for crude flowing in the direction of Poland, Hungary and Slovakia today, the level of organic chlorides does not exceed the norm standing at 1-2 ppm.

Transneft has repeatedly reaffirmed its readiness for extrajudicial settlement of the Druzhba incident’s aftermaths with shippers within the existing contracts for oil transportation, says the Company’s presentation.

Together with the Energy Ministry, the Company has proposed a mechanism of recompensing the shippers, based on the contracts signed, in accordance with the law.

Adapted from the materials of Interfax, TASS and Russia Today
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