FINAM expert: 'The pandemic is having less and less impact on the economy'
Kazanorgsintez PJSC has published financial statements for 9 months of 2021
The petrochemical industry has maintained positive dynamics despite the deterioration of the epidemiological situation on a global scale. Lockdowns are hitting small businesses to a greater extent, almost without affecting polymer manufacturers, FINAM financial group is confident. Financial and economic indicators of one of Russia's largest producers of petrochemical products — Kazanorgsintez PJSC (part of JSC TAIF) confirm this. The company announced interim results of financial and economic activity for 9 months of 2021.
Third quarter is stronger than the previous one
“The quarterly corporate reporting season is just beginning, and not all companies have published reports for the third quarter yet. But it is already clear that the third quarter will be stronger than the previous one due to higher prices for products on world markets," Aleksey Kalachev, analyst at FINAM, expressed confidence.
At the beginning of the year, the market situation was seriously affected by the crisis and weather disasters in the United States. In the second half of 2021, China took over the leadership in influencing the market from the United States. Restrictions on the supply of electricity to industrial enterprises of the Celestial Empire as part of the implementation of the energy efficiency improvement programme have led to a significant reduction, or even to a complete shutdown of a number of leading large-tonnage chemical industries in China. “At the end of September, almost two-thirds of Chinese provinces were experiencing problems with energy supply both in the industrial sector and at the household level," Plastinfo online publication reported. According to the data of SIBUR's trade division in China, in September alone, the production losses of Chinese plants for the production of polypropylene exceeded 287,000 tonnes, polyethylene — about 235,000 tonnes.
Reduction in supply expectedly led to an increase in prices for polymers. The price level is still lower than in April, when up to 2,000 US dollars were paid for a tonne of polyethylene in Europe, but by the end of September, the price tag reached up to 1,500 dollars per tonne. However, market participants note that the situation with energy supply when the state enters the heating season can worsen, which will cause another shutdown, a new reduction in supply volumes and a surge in prices.
The same opinion is held in FINAM: “The fourth quarter may be no less strong due to the energy crisis in Europe and China. Due to rising prices for electricity and raw materials, producers are incurring high costs. Some companies have even announced the suspension of the production of nitrogen fertilisers. Against this background, Russian producers of nitrogen fertilisers, methanol, olefins, and synthetic rubber receive certain advantages, since they do not have such problems with raw materials and energy," Aleksey Kalachev notes.
Net profit of Kazanorgsintez PJSC for the first 9 months of 2021 amounted to 19,8 billion rubles
The revenue of Kazanorgsintez PJSC exceeded 76,5 billion rubles in the first 9 months of 2021. For comparison: in the pre-covid 2019 for the same period, it amounted to 58,2 billion rubles. Net profit as of September 30, 2021 reached 19,9 billion rubles. According to the results of 9 months of 2020, this indicator fell a little short of 6,5 billion rubles, and in 2019, it reached almost 11,7 billion rubles.
There is a significant increase in the volume of sales of products. Besides, it can be noted that the dynamics of greater focus on the domestic, Russian, market continues. If in 2020, for every tonne of products exported, there were about 3,4 tonnes supplied to Russian consumers, today the ratio is about 1:6.
Plastics make up the main part of the total product mix sold by Kazanorgsintez PJSC, reaching almost 90% of the volume. Other petrochemicals and other products form the remaining 10% of the shipment.
Kazanorgsintez PJSC is one of the largest producers of polyethylene and the only manufacturer of polycarbonate in Russia (part of TAIF Group). The only Russian member of the International Association PE100+. All products manufactured by Kazanorgsintez PJSC are certified in the system of the State Standard of the Russian Federation. The company is the largest exporter of polyethylene among the manufacturers of Russia. Kazanorgsintez PJSC supplies products to 36 countries of the world.