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Sistema PJSFC : Sistema announces financial -3-

04/08/2021 | 03:02am EDT

Paper sales volumes increased by 13.8% year-on-year to 289.1 thousand tonnes following growth in production volumes and due to sales of inventoried product. Additional volumes were sold to both existing customers as well as to new customers in China, India, Chile, Argentina and other markets. In 2020, paper sack production increased by 2.3% year-on-year to 1,290.8 million units, following growth of sales. The sales volume of paper sacks amounted to 1,300.8 million units[10], up 5.1% year-on-year. Growth was driven by increased sales volumes at Segezha's European and Russian conversion facilities. In Russia, high demand was due to a shortage of imported products, which also supported an increase in shipment prices. In Europe, demand growth was predominantly concentrated in the construction industry. Plywood production in 2020 amounted to 192.0 thousand cubic metres, unchanged from 2019. Plywood sales volumes increased by 1.9% year-on-year in 2020 to 185.6 thousand cubic metres. In addition to higher sales volumes, revenue growth was also due to higher prices for plywood and an increased share of high-margin products. In FY 2020, sawn timber production grew by 17.5% year-on-year to 1,191.5 thousand cubic metres due to the acquisition in early 2020 of Karelian Wood Company LLC, a logging and woodworking enterprise, as well as an increase in production volumes of existing enterprises. In addition, the reallocation of production capacity at the Sokol PPM from glulam products (CDC) to sawn timber in 2H 2020 had a significant impact. This reallocation was due to the commissioning of a new splicing line to replace an old line, and will increase glulam production capacity at the Sokol PPM by 20%. Sawn timber sales volumes in FY 2020 increased by 21.1% year-on-year to 1,217.3 thousand cubic metres following the increase in production volumes. KEY HIGHLIGHTS IN 4Q 2020 AND AFTER THE END OF THE REPORTING PERIOD

New high-tech paper packaging production line. In November 2020, Segezha installed a new paper packaging production line at the Segezha facility with capacity of 87 million paper sacks per year. The production line uses digital technology to apply glue to packaging, which improves both the quality and speed of gluing while reducing the environmental impact of the finished product.

Expansion of consumer packaging production capacities. In 4Q 2020, preparations began for the installation of four new consumer packaging production lines in the Moscow region with combined capacity of more than 96 million sacks per year.

Launch of new CLT plant. In February 2021, a new cross-laminated timber (CLT) plant with capacity of 50,000 cubic metres was launched in the Vologda region. This represents Russia's first major production facility manufacturing this modern building construction material.

ESG progress. In December 2020, Segezha Group's Board of Directors approved a new health and safety strategy, as well as a new environmental strategy. Both strategies aim to implement global best practices and standards in the Company's business processes.

In March 2021, Segezha Group became a member of the UN Global Compact. The initiative brings together over 16,000 organizations from more than 160 different countries who have strategies that meet certain ESG criteria.

In April 2021, the Board of Directors approved the group's Sustainability Strategy as well as an ESG Policy for the period through 2025. Segezha's new Sustainability Strategy is based on four pillars: innovative forest business; making Russia's forest regions a better place to live; climate-smart forest management and production; and responsible forest supply chain. AGROHOLDING STEPPE ONE OF RUSSIA'S LARGEST AGRICULTURE HOLDINGS AND LAND OWNERS

(RUB million)[11]                         4Q 2020 4Q 2019 Change    FY 2020 FY 2019 Change 
Revenue                                   10,533  9,384   12.2%     32,824  28,487  15.2% 
OIBDA[12]                                 4,428   627     606.0%    9,321   4,190   122.5% 
OIBDA margin                              42.0%   6.7%    35.4 p.p. 28.4%   14.7%   13.7 p.p. 
Operating income                          3,774   105     3,480.7%  7,368   2,694   173.5% 
Net profit/(loss) attributable to Sistema 2,297   (1,303) -         3,909   (584)   - 
OIBDA including AGK Yuzhny[13]            4,428   397     1,010.1%  9,697   4,103   136.3% 

Steppe's revenue for 4Q 2020 grew by 12.2% year-on-year to RUB 10.5 billion. Revenue for FY 2020 grew by 15.2% to RUB 32.8 billion due to positive dynamics in all key business segments. Revenue in the Field Crops and Agrotrading segments grew thanks to execution of an effective sales strategy and growth of grain prices. Positive dynamics in the Dairy Farming segment were the result of growth in the dairy herd size and increased productivity. Revenue in the Sugar and Grocery Trading segment grew thanks to execution of a time arbitrage strategy.

In 4Q 2020 OIBDA increased by 606.0% year-on-year to RUB 4.4 billion due to effective execution of agricultural produce sales transactions, growth of sales of high-margin niche crops and an increase in global prices for agricultural products. In FY 2020 OIBDA increased by 122.5% year-on-year to RUB 9.3 billion primarily due to higher operational efficiency at new land assets, execution of an effective trading strategy and growth of sales prices for own agricultural products, and also thanks to an increase in profitability in the Agrotrading segment and positive dynamics in international trading. The increase in OIBDA was also driven by growth of production volumes in the Dairy Farming segment and the successful execution of a time arbitrage strategy in the Sugar and Grocery Products Trading segment, as well as logistics chains optimisation.

The OIBDA margin in 4Q 2020 increased by 35.4 p.p. year-on-year to 42.0%. For FY 2020 the OIBDA margin was 28.4%, an increase of 13.7 p.p. year-on-year.

In 4Q 2020 and FY 2020 Steppe's net profit was RUB 2.3 billion and RUB 3.9 billion, respectively, compared to a net loss in the previous year, thanks to positive OIBDA dynamics.

Steppe's capex for 2020 totalled RUB 2.5 billion and was primarily allocated to upgrading agricultural machinery and infrastructure improvements, as well as construction and upgrades of dairy farms and acquisition of new land plots.

Net debt in FY 2020 increased year-on-year due to asset acquisitions in 1H 2020 and implementation of the capex programme.

Steppe's land bank as of the end of 2020 stood at 565,000 hectares. The gross harvest as of 31 December 2020 stood at 1,253,000 tonnes. Thanks to intelligent deployment of agricultural technologies amid challenging weather conditions, harvest volumes remained high.

Total area of orchards totalled 780 hectares.

Sales volumes in the Agrotrading segment in 2020 totalled 1,200,000 tonnes. The average export price of wheat in the first half of the 2020 grain season increased by 25% year-on-year

The Dairy Farming segment demonstrated solid growth: in 4Q 2020 gross milk yield grew by 17.1% year-on-year to approximately 19 thousand tonnes, while average daily milk production per cow was 31 kg and the dairy herd reached 6,687 head of cattle. The average price per litre of milk in 4Q 2020 was RUB 31.5, compared to RUB 29.9 per litre in 4Q 2019.

Sales volumes in the Sugar and Grocery Trading segment in 2020 grew by 7.5% year-on-year to 330,000 tonnes, with high-margin transactions executed as part of the time arbitrage trading strategy supporting OIBDA growth for the segment. MEDSI LEADING PRIVATE HEALTHCARE OPERATOR IN RUSSIA

(RUB million)                             4Q 2020 4Q 2019 Change   FY 2020 FY 2019 Change 
Revenue                                   7,797   6,238   25.0%    25,041  22,322  12.2% 
Adj. OIBDA[14]                            2,781   1,880   47.9%    6,888   5,916   16.4% 
Adj. OIBDA margin14                       35.7%   30.1%   5.5 p.p. 27.5%   26.5%   1.0 p.p. 
Operating income                          1,540   999     54.1%    3,704   2,848   30.0% 
Adj. net profit attributable to Sistema14 1,842   1,003   83.7%    3,464   2,920   18.6% 

Medsi's revenue in 4Q 2020 grew by 25.0% year-on-year to RUB 7.8 billion due to deferred demand for medical services following the lifting of COVID restrictions introduced during 2Q 2020, as well as resumption of routine medical care services, the repurposing of the Otradnoe hospital as an in-patient infectious diseases unit, and also increased demand for COVID-19 testing and development of home care and telemedicine. Revenue for FY 2020 grew by 12.2% year-on-year to RUB 25.0 billion, driven by significant growth in the average cheque as a result of provision of COVID-19 diagnosis and treatment services, as well as expansion of the out-patient network in Moscow and the acquisition of clinics in Izhevsk.

Adjusted OIBDA increased by a significant 47.9% year-on-year in 4Q 2020 to RUB 2.8 billion and by 16.4% year-on-year for FY 2020 to RUB 6.9 billion on the back of revenue growth and due to participation in LLC Project Michurinsky, a JV with Capital Group to construct the Nebo residential complex on Michurinsky Prospect. The project contributed RUB 1.6 billion to OIBDA in 2020 compared to RUB 1.1 billion in 2019. The net debt/ adjusted OIBDA LTM ratio remained at a comfortable level of 0.47x.

In 4Q 2020 the adjusted OIBDA margin grew by 5.5 p.p. year-on-year to 35.7%. For FY 2020 the adjusted OIBDA margin grew by 1.0 p.p. to 27.5%.

Adjusted net profit grew by 83.7% year-on-year to RUB 1.8 billion, driven by growth of adjusted OIBDA. For FY 2020 adjusted net profit grew by 18.6% year-on-year to RUB 3.5 billion.

Revenue from the Clinical Diagnostic Centre (CDC) at Belorusskaya in 4Q 2020 totalled RUB 827 million. OIBDA reached RUB 368 million, with an OIBDA margin of 44.4%.

Revenue from the CDC at Krasnaya Presnya in 4Q 2020 was RUB 858 million. OIBDA reached RUB 247 million, with an OIBDA margin of 28.8%.

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Financials (USD)
Sales 2021 10 347 M - -
Net income 2021 327 M - -
Net Debt 2021 10 054 M - -
P/E ratio 2021 17,9x
Yield 2021 1,04%
Capitalization 4 591 M 4 588 M -
EV / Sales 2021 1,42x
EV / Sales 2022 1,31x
Nbr of Employees -
Free-Float 31,9%
Duration : Period :
Sistema PublicFinancial Corporation Technical Analysis Chart | MarketScreener
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Income Statement Evolution
Mean consensus BUY
Number of Analysts 9
Average target price 0,56 $
Last Close Price 0,48 $
Spread / Highest target 28,6%
Spread / Average Target 15,8%
Spread / Lowest Target -24,4%
EPS Revisions
Managers and Directors
Vladimir Sanasarovich Chirakhov President, Chief Executive Officer & Director
Vladimir Petrovich Evtushenkov Chairman
Vladimir Semenovich Shukshin VP, Head-Information Technologies & Security
Ali Mussayevich Uzdenov Chief Investment Director
Robert Sedrakovich Kocharyan Independent Director
Sector and Competitors