Kazanorgsintez shows revenue growth in first half of 2019
The petrochemical enterprise has published its financial statement for the first half of 2019
Net profit of Kazanorgsintez PJSC totalled 7,9bn rubles. Revenue exceeded 40,2bn rubles and rose by 2,7% compared to last year’s analogous period. Experts note that the Russian market influences Kazanorgsintez’s revenue, as the major consumers of the enterprise are located in Russia. Competition in this market is especially high. It is expected to heat up with the launch of ZapSibNeftekhim in Tobolsk. More is in Realnoe Vremya’s report.
Kazanorgsintez PJSC has published its financial statement for six months of 2019. According to the data of the accounting report, the enterprise’s net profit totalled 7,9bn rubles during this period. Compared to the first half of 2018, it reduced by 20,9%. The company’s revenue for the financial period was more than 40,2bn rubles, having increased by 2,7% in comparison with the analogous period in 2018.
Sales revenue amounted to 11,5bn rubles for the first half. Cost of sales insignificantly rose in the first half: it reached 25,6bn rubles and rose only by 8,6%. The volume of non-current assets of the enterprise was equal to 45bn rubles.
The steady economic development of Kazanorgsintez allowed large-scale indexation of salaries in the enterprise this year. The biggest growth affected workers’ salary, they are the biggest category of Kazanorgsintez employees (6,000 people out of 8,300 of the staff). Their salaries grew by 30%. Specialists’ basic salaries rose by 10%. Growth of incomes of managers was from 3 to 7%.
The amount of the bonus for monthly performance is fixed in the collective agreement of Kazanorgsintez at 100% of the basic salary, bonuses of the wage also proportionally grew after the indexation.
In the first half of the year, the average monthly salary of a worker of the industrial group totalled 49,800 rubles (excluding incomes of specialists and the top management).
“Prices for polymers are at quite a high level”
Changes in the market situation affected the financial performance of Kazanorgsintez. Experts note an 11,5% fall in prices for thermoplastics from September 2018, they also forecast a rise in competition in the domestic and foreign markets with the launch of ZapSibNeftekhim.
Aleksey Kalachev, expert analytic at FINAM JSC:
“The Russian polyethylene market continues expanding. Last year, domestic ethylene polymer production in primary forms by 11% to 2,2 million tonnes. Polyethylene production totalled 1,56 million tonnes. In the first half of 2019, the volume of ethylene polymer production in primary forms was equal to 1,15 million tonnes, which is by 1,4% higher than in the first of half last year. Polyethylene production grew by 2,7% in the first half and was 0,84 million tonnes.
The capacity of the domestic polyethylene market totals over 2 million tonnes, and approximately a quarter of it is covered by import supplies. Moreover, about 20% of polyethylene of Russian manufacturers is exported. The polyethylene market is diverse in nomenclature, and if simple forms are exported, mainly end products are imported.
Prices for polymers are at quite a high level, though they reduced in the first half. The index of prices for standard thermoplastics gradually reduced this July from the years-long record high indicators reached last September by 11,5% from 111,800 to 99,000 rubles per tonne. High-density polyethylene cost about 86,200 rubles a tonne on average in July, while a tonne of low-density polyethylene was approximately 99,100 rubles on average. We can expect renewed growth of the index of prices for standards thermoplastics to some 105,000 rubles a tonne till the end of the year.”
Vasily Tanurkov, deputy director of Group of Corporate Ratings at ACRA:
“The ruble prices have been falling since September 2018, and this happens almost uninterruptedly. The average fall has been 11,5% during this time, which is significant for the Russian market. Something similar was observed in late 2015 to the middle of 2017. Prices fell by 20% then.
Prices for plastics significantly correlate with prices for benzene, oil products. And everything is very dependent on the ruble rate. Now the situation in feedstock markets isn’t the best for plastics because the world economy is slowing down. And it is seen in China, which is a big plastic consumer.
We shouldn’t expect growth in demand for plastics in the short run. Even if the ruble slightly weakens, this will favour growth of ruble prices. But if we are making long-term forecasts, the tendency for price fall can go on. This market is very dependent on industrial growth paces in the world, while they are slowing down.
ZapSibNeftekhim’s capacities haven’t been put into operation yet, but when it starts its operation, this can influence Russian prices for polyethylene and polypropylene in the next six months. There has been a serious fall in prices for polystyrene in the last month, prices have reduced by 8%. Polyvinyl chloride is the only type of plastic that went up in price in July. The launch of new capacities of ZapSibNeftekhim won’t influence this market.”