Rosneft, Transneft may disclose privatization details in August
We expect the government to come forward with more detailed plans for the sale of 24% in Rosneft and up to 27% in Transneft. Such details would include the exact size of the blocks, the key steps leading to the sales, possibly including changes to the management team and charter, as well as a range of investors potentially interested in buying.
Rosneft released summary 2Q 10 US GAAP results on July 26, with full results and a conference call expected on August 2. Revenue, EBITDA and net income for 2Q 10 exceeded our expectations: revenue of USD 15.43bn came in 4% above our estimate; EBITDA reached USD 4.75bn, exceeding our estimate by 5%; and net income was 13% above our expectations, which were clearly too conservative.
We estimate EBITDA rose 2% q-o-q with margins unchanged at 30%
Rosneft plans to publish abridged 2Q 10 US GAAP results on Monday, July 26. Full results should be available a week later on August 2 and will be followed by a conference call with management.
According to CDU TEK, Rosneft’s crude output declined 1% q-o-q and refining throughput fell by 8% q-o-q in 2Q 10. At the same time, Urals edged up an average 1% q-o-q in 2Q 10. As a result, we see Rosneft’s revenues increasing by 1% q-o-q to USD 14.85bn, assuming the value of products purchased for resale reverts to the 4Q 09 level.
In line with this analysis, we expect EBITDA up by 2% q-o-q to USD 4.52bn in 2Q 10, with EBITDA margin virtually unchanged from 1Q 10 at 30%. We note that Rosneft recorded a large deferred income tax gain in 1Q 10, which may not recur in 2Q. As a result, we estimate that net income dropped by 7% q-o-q to USD 2.26bn.
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