KazTransOil in 1Q2017 increased its turnover by 2% yoy

Altynay IbraimovaApril 27, 2017

Yesterday KazTransOil published its operational results for the 1Q2017. If we extrapolate these results to the whole of 2017, then they are commensurate with our forecasts.

In particular, in the reporting period, oil transportation on a separate basis increased by 1%, and oil transportation on a consolidated basis, on the contrary, decreased by 1%.

At the same time, there is a positive dynamics in the freight turnover, both on a separate and consolidated basis, which indicates an increase in the average pumping distance. Thus, the volume of general and individual cargo turnover increased by 2% and 3%, respectively.

Table 1. Operational results - 1Q2017

Name

units

1Q2017

1Q2016

yoy

Volume - cons

ths tons

14263

14350

-1%

Volume – non-cons

ths tons

11170

11068

1%

Turnover - cons.

ton*km

11386

11186

2%

Turnover – non-cons

ton*km

9403

9109

3%

Source: Company data

Our view

The operational results are definitely positive, given the increase in freight turnover in spite of a reduction in transportation. Our expectations for an increase in the average oil transportation distance have been confirmed, showing an increase of 3% compared to 2016 and ensuring a similar increase in freight turnover.

Proceeding from this, we confirm our forecasts that the average distance for the remainder of 2017 will not be less than 840 km. This gives us reason to maintain our BUY recommendation with 12M  TP of T1 634 / share.