SIBUR's earnings up 32% in 2015 on expansions

SIBUR's earnings before interest, taxes, depreciation and amortisation (EBITDA) rose 32% year on year in 2015 on the back of capacity additions and increasing sales, the Russian petrochemical major said on Thursday.

EBITDA stood for the full year at rouble (Rb) Rb136bn (€1.76bn) while revenue for 2015 was 5.2% higher than in 2014 at Rb380bn, in accordance with International Financial Reporting Standards (IFRS), SIBUR said.

‘‘In 2015, SIBUR demonstrated strong financial results despite the challenging external environment primarily on the back of the expansion of our petrochemical business,’‘ said the company.

“SIBUR demonstrated the significant growth in revenue and sales volumes of petrochemical products attributable to capacity expansions in PET [polyethylene terephthalate] and BOPP-films [biaxially-oriented polypropylene], as well as an increase in glycols production due to [the] low base of 2014 as a result of the shutdowns at our production sites in 2014,” it added.

Net profit for the period, however, collapsed 74% to Rb6.51bn, partly on the back of foreign exchange losses.

A spokesperson for SIBUR added the company’s debts are mostly denominated in dollars, which was during 2015 one of the currencies which the rouble fell the most against, biting into net profit.

Another reason that profit suffered during 2015 was the lack of extraordinary payments which had taken place during 2014.

SIBUR’s EBITDA margin increased during 2015 more than seven percentage points to 35.7% as the company took advantage of higher production volumes across the board.

Revenue also increased in all divisions. While energy products sales went up 6.2% in 2015 year on year, the rest of the divisions saw double-digit increases.

Sales of plastics and organic synthesis products increased by 39.3% year on year to Rb63.7bn, revenue from basic polymers jumped 32.6% to Rb50.9bn and those from synthetic rubbers increased by 26% to Rb35bn.

On average, SIBUR’s sales from petrochemical products increased by 32.7% during 2015, year on year, to Rb175.8bn.

SIBUR admitted the economic environment in 2015 had remained “challenging” but attributed its strength to the expansions. Moreover, a depreciated rouble on the back of the Russian recession during the year helped the company when selling its products abroad.

The company’s production volumes also increased in all petrochemical products during 2015, with synthetic rubbers sales volumes up by 14.2% year on year and polypropylene production volumes increasing 30.6% year on year.

“As of 31 December 2015 our total debt increased by 121.6% year on year to Rb457.1bn. The increase was attributable to the funding for [the] ZapSibNeftekhim [ethylene cracker], the new borrowings to fund the acquisition of a 49% stake in OOO Yugragazpererabotka and the revaluation of loans denominated in foreign currencies,” concluded SIBUR.