SIBUR reports Q3 and 9M 2021 IFRS results

PJSC SIBUR Holding, the largest integrated petrochemicals company in Russia and one of the fastest-growing companies in the petrochemical industry globally, today announces its operating and financial results for the third quarter and the first nine months of 2021 in accordance with International Financial Reporting Standards (IFRS).

Highlights for Q3 2021:

• Revenue of RUB 223.4 bln, up 11.2% quarter-on-quarter
• EBITDA of RUB 107.2 bln, up 11.1% quarter-on-quarter
• Adjusted net profit of RUB 72.5 bln, up 15.4% quarter-on-quarter
• Net debt on 30 September 2021 of RUB 359.8 bln, up from RUB 334.7 bln on 30 June 2021
• Net debt to EBITDA (in both RUB and USD) decreased over the quarter to 1.1x

Financial and operating results

¹ Adjusted profit equals profit for the period attributable to shareholders of the parent company, adjusted for foreign exchange gain/loss and result of subsidiaries’ acquisition and/or disposal and remeasurement of related liabilities and/or assets. ² SIBUR’s share

Peter O’Brien, Chief Financial Officer and member of the Management Board at SIBUR, said:

“SIBUR continues to deliver strong operating and financial performance amid a recovery in global demand and positive pricing trends caused by a shortage of supplies due to unfavorable weather conditions in the USA this year. The timely commissioning and launch of ZapSib enabled us to partially mitigate the impact in Russia of the supply-demand imbalance on global markets.

In Q3 2021, revenue grew in all three of our business segments, driving total revenue for the period higher by 11.2% quarter-on-quarter. We continue to focus both on improving operational efficiency across the business and on optimizing brand assortment and logistics, primarily on the domestic market.

“Our financial performance has enabled us to continue reducing leverage. Net debt decreased by more than RUB 43 billion over the first nine months of the year. Together with increased profitability, this has enabled us to reduce our net debt to EBITDA ratio from 2.3x to 1.1x since the beginning of the year.

“We continue to plan and implement key growth projects in line with our sustainability goals, including increasing our use of renewables and reducing emissions per tonne of production. As part of the construction of the Amur Gas Chemical Complex (Amur GCC), in September 2021 we signed a 20-year contract with RusHydro for 1.3 billion kWh of renewable energy per year, which will enable the Amur GCC to operate in line with the highest environmental standards.

“Following the initial announcement in April, we reached a final merger agreement with TAIF. This will considerably expand the scale of SIBUR’s business, and also create new opportunities both for our future growth and for our customers in Russia and around the world.”

Financial results

In Q3 2021, revenue increased by 11.2% to RUB 223.4 billion,[1] up from RUB 200.9 billion in the previous quarter, as a result of the following trends across our business segments:

• Revenue in the Olefins & Polyolefins segment increased by 12.3% to RUB 3 billion. This increase was driven by positive price dynamics and higher sales: sales volumes in this segment increased by 20.3%.
• Revenue in the Plastics, Elastomers & Intermediates segment increased by 6.6% to RUB 54.9 billion, mainly driven by positive price dynamics in RUB terms across all product categories and a recovery in demand.
• Revenue in the Midstream segment increased by 17.5% to RUB 56.1 billion due to higher prices for LPG and naphtha on the back of positive price dynamics in international commodity markets, caused by abnormally high natural gas prices and continued growth of crude oil prices this year.

Operating results

In 9M 2021, SIBUR’s gas processing plants (GPPs) processed 15.2 billion cubic meters of associated petroleum gas (APG). Raw NGL fractionation increased by 4.7% year-on-year to 6.1 million tons as a result of increased supplies of feedstocks under long-term contracts with external suppliers. External LPG sales decreased by 22.3% to 2.0 million tons as LPG volumes were redirected for further processing and also as part of our efforts to meet the needs of domestic consumers.

Sales of polypropylene in 9M 2021 increased by 13.4% to 937 thousand tons, and sales of polyethylene increased by 43.3% to 1,319 thousand tons due to an overall increase in production volumes as ZapSibNeftekhim reached full capacity. Sales of plastics and organic synthesis products in 9M increased by 1.4% year-on-year to 611 thousand tons.

Borrowings

SIBUR’s Net Debt as of 30 September 2021 amounted to RUB 359.8 billion. The net debt/EBITDA ratio decreased from 2.3x to 1.1x over the first nine months of 2021 due to higher EBITDA and a reduction in the Company’s net debt.

Results by segment

Olefins & Polyolefins

¹ Including intra-segment transfers; ² EBITDA adjusted for the Group’s portion of EBITDA of joint ventures and associates and net of the non-controlling interest of related subsidiaries’ EBITDA

SIBUR continued to meet the demand of the Russian market, supporting above all domestic customers.

Production of olefins and polyolefins in 9M 2021 increased by 23.7% year-on-year, while production of polyethylene and polypropylene increased by 27.8% and 20.5%, respectively.

External sales volumes of olefins and polyolefins in 9M 2021 increased by 24.5% year-on-year to 2.5 million tons. Domestic sales volumes increased by 29.1%, while export sales grew by 20.6%.

Plastics, Elastomers & Intermediates

¹ including intra-segment transfers; ² plastics and organic synthesis products; ³ intermediates and other chemicals; ⁴ MTBE and fuel components; ⁵ EBITDA adjusted for the Group’s portion of EBITDA of joint ventures and associates and net of the non-controlling interest of related subsidiaries’ EBITDA; ⁶ transfers from the Olefins & Polyolefins segment

Midstream

¹ including intra-segment transfers; ² EBITDA adjusted for the Group’s portion of EBITDA of joint ventures and associates and net of the non-controlling interest of related subsidiaries’ EBITDA; ³ SIBUR’s share; ⁴ including ethane-propane mix volumes

In 9M 2021, sales of LPG decreased by 22.3%, as a portion of volumes were redirected for further processing in the petrochemical segment. Sales volumes of naphtha remained practically unchanged from 9M 2020.

The full version of the Consolidated Audited Financial Information as of and for the nine months ended 30 September 2021 in accordance with IFRS is available on our website at http://investors.sibur.com/results-centre/financial-results.aspx?sc_lang=ru-RU .

[1] This indicator reflects only external sales and does not include intra-segment transfers.