Ukrnafta tax debt rises 11% qoq in 2Q16

Ukraine’s leading crude oil producer Ukrnafta (UNAF UK) posted a 43% yoy decline in its revenue to UAH 8.90 bln in 1H15, according to its July 25 filing. Declines were reported in each of its segments, including -33% in crude oil, -30% in ammonia and -47% in oil products. The company’s EBITDA fell to UAH 0.07 bln in 1H16 from UAH 5.25 bln a year before. This was still a significant improvement compared to negative EBITDA of UAH 0.45 bln in 1Q16. The company’s bottom line was slightly negative in 1H16, compared to UAH 3.91 bln in net profit posted a year before.

Ukrnafta’s trade receivables worsened during the second quarter and amounted to UAH 13.57 bln as of end-June (+18% qoq), while being slightly lower YTD (-1%). Worsened cash collections resulted in an increase in the company’s tax payables, which rose 11% qoq to UAH 11.13 bln as of end-June. The year-to-date increase in tax payables was 5%.

Alexander Paraschiy: The company’s P&L results are, as usual, not consistent and hard to interpret. Its balance sheet illustrates the company was not able to even start solving its tax debt issue, which is a worrying signal. As a positive development, the company’s supervisory board was able to meet last week to schedule a shareholder meeting for September 15, aimed at approving a tax restructuring plan. Hopefully, the approval of such a plan will enable the company to remain operative.