SIBUR REPORTS FY 2018 IFRS RESULTS

Moscow, 21 February 2019. ПPAO SIBUR Holding, an integrated petrochemicals company, today publishes its operational and financial results for the fourth quarter and full year ended 31 December 2018 in accordance with International Financial Reporting Standards (IFRS).

Operational and financial highlights for FY 2018

• Substantial progress on ZapSibNeftekhim construction: as of 31 December 2018, the project was 92.5% complete, compared to 71% as of 31 December 2017. The polypropylene unit was 99.6% complete, steam cracker was 96.0% complete and polyethylene unit was 95.0% complete as of the same date.
• EBITDA increased by 25.0% year-on-year, reaching an all-time high of RUB 201 billion
• Revenues increased by 25.1% year-on-year due to higher midstream products prices
• Raw NGL fractionation volumes increased by 2.5%⁽¹⁾ year-on-year
• Plastics and organic synthesis products sales volumes increased by 3.8% year-on-year

SIBUR’s CEO Dmitry Konov commented:

“2018 was a year of great success for us, as we achieved record-breaking financial results and confidently reached the final stage on the way to the launch of ZapSibNeftekhim, one of the world’s largest polyolefin production facilities. This large-scale investment project is the largest single-unit polyolefin production facility, which will become a landmark event post-launch not only for SIBUR, but also for the entire Russian petrochemical sector, supplying a wide range of industries, including FCMG, automotive industry, construction and pharmaceuticals. As a result of the professionalism and synergetic efforts of the SIBUR team through the whole year, the project is well ahead of the original schedule, and the mechanical completion is now scheduled for Q2 2019 instead of late 2019.

In 2018, the Company’s revenue increased by 25.1% due to favourable pricing of petrochemical products, rising beyond RUB 0.5 tn. Despite a surge in petrochemical feedstock prices in the reporting period, the Company’s EBITDA also grew by 25%. The EBITDA margin remained consistently high at over 35%, primarily due to the Company’s balanced business model and returns on earlier investments. Due to our carefully considered financial policy, leverage remained at the same comfortable level as reported last year. Our results in 2018 will further support the Company’s strategy to diversify its sales markets, to increase the share of high added value cutting-edge products, and to improve operational efficiency.”

Operational results

In 2018, SIBUR’s gas processing plants (GPPs) processed 22.3 billion cubic metres⁽²⁾ of APG, almost on a par with the previous year. As a result, production of stripped dry gas (SDG) totalled 19.4 billion cubic metres⁽²⁾. Raw NGL fractionation volumes increased by 2.5% year-on-year reaching 7.7 million tonnes⁽¹⁾. Additional volumes contributed to an increase in LPG sales volumes of 8.8% year-on-year, to 5.4 million tonnes. SDG sales volumes remained flat year-on-year at 18.5 billion cubic metres.

SIBUR increased sales volumes of most of its petrochemical products. Sales of plastics and organic synthesis products increased by 3.8% year-on-year to 800 thousand tonnes as a result of higher alcohols production due to a two-year maintenance cycle at our production site in Perm, accompanied by higher glycols output due to increased productivity and the start of production of a new type of polystyrene since June 2018. Sales of elastomers remained flat year-on-year at 486 thousand tonnes. Sales of polypropylene decreased by 2.5% year-on-year to 583 thousand tonnes due to a maintenance shutdown in Tobolsk. Sales of polyethylene (LDPE) decreased by 2.2% year-on-year to 262 thousand tonnes driven by planned maintenance shutdown of our production site in Tomsk.

Financial results