Ukrnafta EBITDA triples yoy, tax debt rises in 1Q18

Net revenue at Ukraine’s leading oil producer Ukrnafta
(UNAF UK) rose 26% yoy to UAH 8.27 bln, according to its regulatory filing
released last week. Its EBITDA tripled yoy to UAH 2.00 bln and bottom line surged
18x yoy to UAH 1.26 bln. Despite significant P&L improvement, the company
failed to reduce its tax payables, which rose 2% qoq to UAH 13.00 bln.

Alexander Paraschiy: It looks like all the operating profit generated by Ukrnafta went to
finance its working capital (the company did not provide its cash flow
results). For instance, its receivables and repayments made swelled 56% qoq (or
UAH 2.91 bln qoq) to UAH 8.07 bln. That said, the improved P&L was not
helpful for the company in resolving its key issue, which is keeping Ukrnafta
as a going concern. All in all, we remain concerned about the company’s future
and do not consider its stock to be an investment opportunity.