SIBUR posts 29% decline in FY 2008 net income; expects 'downturn' by 2009 end

30-Apr-09

SIBUR, Russia's largest petrochemical company, posted a net income of 16.0 bln rubles (US$481 mln) for FY 2008, a 29.2% decline compared to the bottom line in the same period last year. The reasons attributable to decline in net income were an increase in the overall tax burden, higher interest charges as well as losses from operations as a result of dramatic fluctuations in foreign currency exchange rates. However, the company recorded a year-on-year increase of 21.6% in sales revenue and 22.6% in EBITDA for FY 2008. For the period ending Dec 31, 2008, the company's sales revenue stood at 173.5 bln rubles (US$5.2 bln) while its EBITDA amounted to 40.7 bln rubles (US$1.2 bln). Sibur spent a total of US$33.6 bln rubles for expansion and upgradation of facilities in 2008. Among the important projects completed for the period included expansion of Nizhnevartovsk and Belozerny gas processing plants. The design work for the production of polypropylene (PP) at Tobolsk city, the PVC plant in the Nizhny Novgorod region and the increased capacity of Yuzhno-Balyksky gas processing plant is underway. SIBUR President Dmitry Konov said, "In the first half of 2008 petrochemical prices were at an all-time high. However, in recent months our company, as well as the petrochemical industry overall, operated at a loss. As a result, at the end of 2009 we expect to report a downturn in our financial performance, whilst maintaining current margins".