SAMRUK-KAZYNA JSC TO EXCEED ITS PLANNED FINANCIAL PERFORMANCE FOR THE HALF YEAR

SAMRUK-KAZYNA JSC TO EXCEED ITS PLANNED FINANCIAL PERFORMANCE FOR THE HALF YEAR

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30 July 2020

The net income of the Samruk Kazyna group of companies in the first half of 2020 amounted to about KZT212 bln, while according to the plan, a loss of KZT150 bln was expected. This was stated during an online briefing by the co-managing Director for Finance of Samruk Kazyna Fund Yernar Zhanadil.

The operating profit of the Fund and the group of companies for January to June 2020 amounted to KZT215 bln, which is higher than the planned values by KZT79bln. The consolidated net profit of the Samruk Kazyna group of companies is expected to reach KZT421 bln by the end of 2020, with a planned figure of KZT167 bln.

According to Y. Zhanadil, the crisis trends in the market significantly affected the group's financial results. However, the Fund's portfolio companies are implementing updated targets, taking into account the adjustments made in view of COVID-19, and continue to take measures to strengthen financial stability.

"At the end of 2019, the Fund received a net profit of KZT206 bln. As a dividends payer, the Fund directs all profits to the State. KZT49 bln has already been sent to the national Fund of the Republic of Kazakhstan, the proceeds from the additional placement of KAP shares in 2019. In addition, at the end of 2019, the Fund will send the government dividends in the amount of KZT120 bln. The remaining funds will be used to Finance social facilities in the cities of Turkestan and Nur-Sultan, according to the instructions of the Government, as The sole shareholder of the Fund," said Yernar Zhanadil.

Yernar Zhanadil noted that in view of the current market situation, the Fund has revised its approach to managing the financial resources of portfolio companies and reduced expenses.

"Taking the significant changes in the external environment into account, in accordance with the updated development Plan of the company, the Group reduced expenses by KZT429 bln. The group's companies have taken measures to optimize their expenses taking into account the least damage to the production and strategic goals of the companies, " said Yernar Zhanadil.

There is also a decrease in accounts receivable by 60 billion tenge, amounting to 661 billion tenge for the Fund's group within 6 months of 2020.

According to Yernar Zhanadil, positive financial indicators are due to the increase in the average oil price, the strengthening of the tenge against the dollar, as well as the results of the group of companies' activities.

In particular, due to the growth of transit cargo turnover by 24%, "KTZh" JSC increased its operating profit, "Samruk-Energy” JSC increased the volume of heat production by 2%, mining and sales of coal by 2% and 3%. KEGOC ensured a 6% increase in electricity capacity readiness to bear the load. “Kazakhtelecom” JSC exceeded the planned revenues for fixed and mobile services.

Despite the deterioration of the macroeconomic situation in the first half of the year, the total debt of the Fund increased slightly by 3.9% while the external debt of the group decreased compared to the beginning of the year. Yernar Zhanadil associates the increase in the total debt from 8.8 trillion to 9.2 trillion tenge with the weakening of the tenge. 

At the end of his speech, Yernar Zhanadil announced the continuation of the event to strengthen the financial stability of the group. 

In particular, in July, JSC KTZ completed a transaction for the partial buyback of Eurobonds in the amount of USD 277.8 million with a coupon of 6.95% and maturing in 2042 at the expense of funds raised in rubles, thereby reducing dependence on US dollar exchange rate.

In May, KazTransGas JSC completed a transaction for the partial buyback of Eurobonds from its own funds in the amount of USD 43.7 million with a 4.375% coupon and maturing in 2027. The deal was closed at a price below par about $ 95. As of the current date, the price is about $ 108.

GRES-2 will refinance its foreign exchange obligations in US dollars and rubles by attracting a loan in tenge for 105 billion tenge at 12% in early August 2020. The current average borrowed capital rate of GRES-2 as of March 31’20 was 12.5% ​​per annum taking into account the negative impact of currency risk.