Kazanorgsintez begins 2019 with revenue growth
The enterprise has published the Q1 2019 report
Kazanorgsintez has published a report on its financial performance in the first quarter of 2019. The enterprise’s assets have risen by 4,6% and totalled 77,1bn rubles. Revenue has also increased to 19,9bn rubles. But changes in the market situation have affected its profit. More is in Realnoe Vremya’s report.
Growth of assets
Kazanorgsintez PJSC has published the Q1 2019 report. According to data of the balance sheet as of 1 April 2019 compared to 1 January 2019, the enterprise’s assets has grown by 4,5% and totalled 77,1bn rubles. The rise has happened thanks to increasing current assets: first of all, money and investments. Despite the launch of new industrial sites (new pyrolysis furnaces, a new carbon black concentrate unit) and new projects that began in 2019, Kazanorgsintez still does without borrowed money.
Rise in revenue and production
Although the first quarter of 2019 turned out unsuccessful for the gas and petrochemical sector, Kazanorgsintez felt quite good. It should be reminded that according to head of Tatneftekhiminvest-holding Rafinat Yarullin KOS was one of the two enterprises of the Tatarstan gas and petrochemical complex to manage to augment production against the backdrop of a reduction of production in the sector in general. The rise at Kazanorgsintez has amounted to 2,7%.
Kazanorgsintez’s net profit in the first quarter has been 4bn rubles
The company’s revenue has also grown: 19,9bn rubles against 19,6bn rubles in the analogous period in 2018. Meanwhile, the cost of sales has risen to 12,4bn rubles.
The growth of cost of sales together with changes in the market situation has affected the enterprise’s financial performance. Kazanorgsintez’s net profit in the first quarter has been 4bn rubles, which is by 16,6% lower than the result of last year’s analogous period. Last year, low-density polyethylene prices reached a record high in history, its share in Kazanorgsintez’s revenue is higher than other types of products. The prices fell in November-December due to a rise in supply and a fall in demand. The fall wasn’t won back in early 2019.
Kazanorgsintez exports goods to 32 countries
Every year Kazanorgsintez augments production: the factory produces 1,8m tonnes of organic synthesis products. Ethylene polymer and copolymer and polycarbonate are the flagship products (86,3% in value terms). The share of the enterprise’s ethylene polymer and copolymer and polycarbonate in overall Russian production is equal to 40% and reached 716,000 tonnes.
Kazanorgsintez also manufactures 78,000 tonnes of polycarbonate with a prospect to augment the production to 100,000 tonnes a year, 73,000 tonnes of bisphenol A, 70,000 tonnes of phenol and 45,000 of acetone. The enterprise supplies 82% of manufactured goods to the domestic market, the rest is exported. Companies from Kazakhstan, Ukraine, Belarus, China, Singapore, Lithuania, Serbia, Uzbekistan are major purchasers of Kazanorgsintez goods. Supplies to South America have been arranged: Uruguay, Chile and Brazil. The factory’s goods are supplied to 32 countries.
Chemical production growth in Russia
Experts of the gas and petrochemical market, in turn, note 1,6% growth of the volume of chemical production in Russia in the first quarter of 2019.
Polyethylene production has risen by 1,2%, polystyrene has by 0,6%, polyvinyl chloride – by 3,8%, polypropylene production has reduced by 6,8% and polyamide has by 7,9%.
Deputy Director of ACRA’s Corporate Ratings Group Vasily Tanurkov said that polymer prices in the world market had been stable, Russian prices in rubles had changed mainly after changes of the ruble rate. “The stronger ruble rate in January-April 2019 reduced rubles prices by 2,3% on average by late April compared to December 2018,” Vasily Tanurkov added.
The expert expects a dramatic shift in sales (exports/imports) in Russia’s petrochemical market in the second quarter of 2019. The changes will be, first of all, linked with the launch of ZapSibNeftekhim. Thanks to the capacities, the polyethylene production volume in Russia might considerably exceed consumption in 2020. Moreover, net polyethylene exports will reach 1,1m tonnes a year. The analogous situation is also expected in the polypropylene market where net imports of 0,1m tonnes a year in 2018 will change for net exports of 0,9m tonnes in 2020.