Ukrnafta reports another strong quarter in 3Q15

Ukraine’s leading crude oil producer and gasoline retailer Ukrnafta (UNAF UK) posted a 16% yoy increase in net revenue to UAH 21.0 bln in 9M15, according to its Oct. 26 filing. Its sales of crude oil increased 30% yoy, sales of ammonia advanced 2.1x yoy while sales of oil products reportedly declined 35% yoy in 9M15. Ukrnafta’s EBITDA for the period advanced 2.5x yoy to UAH 5.73 bln and bottom line jumped 5.3x yoy to UAH 4.06 bln.

The result implies that in 3Q15, Ukrnafta’s revenue fell 11% yoy to UAH 5.47 bln, while EBITDA jumped 6.6x to UAH 475 mln. The same data suggests that the company’s oil product sales plunged 80% yoy in 3Q15.

Alexander Paraschiy: The company’s high profit seems to be encouraging news for minority shareholders, as Ukrnafta usually distributes all its earnings in dividends. High dividends, however, are not secured for the future, we believe. First of all, due to lack of transparency and reliability of the company’s interim financials, its nine-month profit does not guarantee that the company will finish the full year with a strong bottom line. Secondly, the company’s new CEO is designing a new strategy for the company, which, if approved, might result in much smaller dividend payout ratios in the future.