Stability in crisis: TAIF GC draws conclusions for 2015
According to the year-end results, the holding augmented its balanced revenue by 11,7% and increased tax payments in the budget of the republic by 6,6,bn rubles
Today one of the largest group of companies of Russia TAIF made its annual report for 2015 public. The last year, which was a year of its 25th anniversary, allowed the holding to generate a total revenue equal to 524bn rubles. And the execution of the adopted production programme provided TAIF Group with the further fulfilment of strategic plans. A correspondent of Realnoe Vremya studied the financial and production results of the Group of Companies for 2015.
Expenditures on budget of Tatarstan increased by 45%
According to the data of the document, the Group got a balanced profit at 617bn rubles for the accounting period, which is 34,7bn rubles or 6% more than in 2014. At the same time, the revenue totaled over 524bn rubles and increased last year's indicator – 469,1bn rubles.
High economic results allowed the company to increase its EBITDA indicator that demonstrates potential possibilities in financing and evaluation of the company, by 72,8bn rubles. In 2015, it was over 140bn rubles, that is to say, 2 times more than in 2014.
Profit growth of the GC results in the growth of profits for the republic – TAIF is one of the largest taxpayers in Tatarstan. For instance, last year, tax payments equal to more than 63bn rubles were expended to all budgetary levels and non-budgetary funds. 21,2bn rubles were sent to the consolidated budget of Tatarstan, which is 6,6bn rubles higher or, more precisely, 45% more than last year.
The annual report for 2015 illustrates that the financial and economic results of the head company have been the most successful for the whole working period of the holding. So, profits of TAIF PJSC 111,3bn rubles, including sales of goods and indirect taxes, and its revenue grew by 13,5% and made up 94,4bn rubles. Receipts on commodity transactions, leasing and profits from acting as a surety account the greatest share in the structure of its profits.
Indicators of financial stability in 2015 have been higher than a standard. So, the coefficient of its financial independence is 0,9, debt-to-equity ratio makes up 7,2, which demonstrates an over sevenfold settlement of its debts.
Over 69bn rubles for modernization
Production indicators were mentioned in the annual report of the company. The companies of the Group have been taking good positions in the Russian market for many years concerning the production of petrochemical and oil refining products. For example, the share of TAIF GC in the total production volume in Russia in the accounting period looks the following way: plastics – 42%, rubbers – 74%, straight-run gasoline – 8%, diesel fuel – 3%, motor fuel – 2%. And its share in the total production volume in Tatarstan in 2015 is: plastics – 100%, rubbers – almost 100%, straight-run gasoline – 100%, diesel fuel – 60%, motor fuel – 90%.
Petrochemical and oil refining products manufactured by the enterprises of the GC is in a high demand both on the domestic and foreign markets. Despite an increased economic uncertainty in recent times and prolongation of economic sanctions by the USA and the EU countries, GC increased its revenue selling petrochemical and oil refining goods by 55,1bn to 524,2bn rubles. And sales in the domestic market accounted for 67% of the total revenue. The share of sales in the foreign market made up 33%. Markets of Northwestern Europe, Mediterranea, Asia, Northern and Southern America, Africa and CIS countries are target markets for the realization of products.
And profit from sales of goods of the Group in chemistry and petrochemistry in 2015 made up 261,5bn rubles against 224,5bn rubles in 2014. Its revenue increased by 16,5% — from 202,3bn rubles in 2014 to 235,7bn rubles in 2015. And the investments in the main funds were 25,5bn rubles, which is 1,5 times higher than in the previous year.
Capacities of the main productions increased for 15 years thanks to the development strategy. So, ethylene production grew 1,5 times more, polymers – 3,2 times, rubbers – 2,3 times, plastics – 3,8 times.
The results of the work achieved by the GC directly connected with investments. During recent years, large investment projects on the construction of new and modernization of active plants have being realized by TAIF. The volume of investments of TAIF GC in 2015 totalled 69,5bn rubles.
All investment programmes have a long-term character and constantly renewed taking account the current economic situation. The cost of the realization of development programmes till 2025 are estimated at 492bn rubles. It will allow to make a profit at 1,5tr rubles in 9 years and increase tax payments to all budgetary levels to 134bn rubles.
Apart from petrochemistry and power engineering, the companies of TAIF continue an active work in other sectors of the economy too: construction, telecommunications, trade, services, investments. The revenue of the activity of the company in other spheres was 123,5 rubles or 9,5% more than 112,7bn rubles in 2014.
Record refinery volumes
Development of oil refinery, chemistry, petrochemistry and power engineering as strategically important spheres of the industry and economy of the Republic of Tatarstan is the top direction of the work of TAIF GC. The companies of these sectors have a significant share in total indicators of the Group. So, over 76% of balanced profit – 471,6bn rubles – were earned by the companies working in oil and gas refining, chemistry, petrochemistry and power engineering.
The last year was a watershed for the oil and oil and gas refining sectors of the industry because of colossal fall in the world oil prices. Record volumes of oil and gas raw material were refined in TAIF-NK in these conditions – 8,4m tonnes. Oil conversion rate of the inward raw material was 73% in 2015, which is a bit lower than an average sectoral indicator because of the quality of supplied oil which is being worse year after year. TAIF-NK is one of a few Russian companies refining heaviest and high-sulfur oil. It inevitably brings to an unregulated, uncalculated worn out of units of the oil refiner. It results in an urgent need for implementation of new technologies and development of deep refinery in TAIF-NK.
In general, according to the results for 2015, TAIF-NK produced 8,2m tonnes of products, including 5,1, tonnes of light oil products. The revenue of the company in oil and gas refinery was 143,2bn rubles against 132,5bn rubles in 2014. However, sales revenues fell and made up 184,4bn rubles, while this indicator was equal to 199,9bn rubles last year. This is explained by the current macroeconomic situation in the world – not only oil prices dropped, prices for oil products decreased more.
Despite the weakening ruble and inflation, the enterprise carried out all planned projects and programmes in 2015 that total 40bn rubles. At the end of the last year, TAIF-NK produced a new standard gasoline Euro-5 before the deadline set by the Russian government. They constantly work on quality improvement of not only gasoline but also road bitumen.
The current production of road bitumen of TAIF-NK will be modernized, and the a unit for polymer modified bitumen production is built to improve the quality of road surfaces in Tatarstan and nearest regions.
The new unit will allow to introduce molecules of synthetic rubber in molten bitumen. This structure of road bitumen will increase the prime cost of its production just a bit and enable to reach one of the best quality indicators in the world.
Moreover, TAIF-NK is finishing its largest project – the construction of Heavy Residues Deep Conversion Complex, which will allow to avoid the production of oil products with low market value. As we had written, a unique VebaCombiCraking technology is the basis of the project. So, the production will be wasteless, and the oil conversion rate will reach 98,5%. And the design used in the construction of the Unit exclude any possible impact on the environment during the production.
Stake on development of their own power stations
Power engineering is a condition of the constant growth of productions of the Group. Last year, the tendency of increase of power engineering at its own power stations of industrial enterprises of Russia continued. It allows to reduce the dependence of the companies on prices for electric power and their fluctuations in the market, reduce costs on the construction of networks and technological connections, decrease losses of electric power and consumption for its transmission.
The core activity of TAIF GC in power engineering is represented by TGC-16 PJSC energy company. It reliably and constantly provides industrial enterprises of the holding and the population of Tatarstan with electric and heat power. Its total revenue in 2015 was 21,8bn rubles, while it was 21,6bn rubles in 2014.
Thanks to the installed electric capacity, TGC-16 PJSC confidently takes the second position among generation companies of Tatarstan. At the end of 2015, this indicator was 1264 MW, which accounts for 17% of the total volume of the installed electric capacity of the generating companies of Tatarstan. The installed heat capacity of equipment of combined heat power plants of TGC-16 made up 5681 Gcal or 43% of the installed heat capacity in the republic.
Sale of heat power, whose share is 61%, plays a major role in the structure of profits of TAIF GC.
TGC-16 is the largest heat producer in Tatarstan. The CHP Plant in Nizhnekamsk produced the greatest volume of heat power among power stations of the company. Its share in the total volume in 2015 was 81%.
Construction of a new energy block in the Kazan CHPP-3 based on new GE's 9HA.01 gas turbine with a capacity equal to 388,64 MW is a top investment project of the energy company at this moment. The unit will allow to increase electricity generation and significantly reduce the energy use for electric power production.
16bn rubles for social projects
An integrated work on the realization of social programmes, including ecology and occupational safety, is an obligatory condition of work and development of a business. In 2015, the holding expended 8,5bn rubles on environmental measures, 2,8bn rubles – on industrial safety and 1,4bn rubles – on occupational safety and health.
Last year, the companies of TAIF expended 16bn rubles on the realization of social projects, including the support of childhood, education, culture, health and sport.
TAIF traditionally pays much attention to the support of professional sport in Tatarstan except popularization of mass sports and healthy lifestyle. Due ещ a long-standing cooperation and financial aid of GC, key teams of Tatarstan successfully compete in Russian and international competitions. As the annual report for 2015 demonstrates, the companies of TAIF spent over 2,46bn rubles on the popularization of sport and healthy lifestyle.
TAIF continues to finance еру restoration of the complexes of building in the insular town of Sviyazhsk and ancient Bolgar within the scope of the programme of the museum-reserve. 400m rubles were spent on this purpose in 2015, and over 600m rubles in total since 2012.
A special attention is paid to social programmes for workers of the enterprises of the Group who number 43,000 people. The TAIF worker's average salary has reached 40,500 rubles per month. The level exceeds average indicators by 38% in the republic and 19% in Russia.
Participating in the fulfilment of the regional programme of social mortgage, the workers of the Group were provided with dwellings with an overall area of 40,900 square metres in 2015. What is more, TAIF is successfully carrying out its own additional housing programme. Thanks to this programme, in 2015, the workers of the Group were provided with dwellings, the overall area is equal to 83,000 square metres. This programme presupposes a grant of loan for payment of the initial instalment. In 2015, the total sum of mortgages was 333m rubles.
In conclusion, stable financial results allow the holding to constantly fulfil its social obligations. And an intelligent management of their equity capital allows to systematically increase these results and accept investment projects in the conditions of the unstable economy.