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transcript
Operational and financial results in 2017
May 2018
S T R I C T L Y P R I V A T E A N D C O N F I D E N T I A L
Disclaimer
2
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S T R I C T L Y P R I V A T E A N D C O N F I D E N T I A L
Presenting team
3
Dair Kusherov
CFO
Botagoz Baibatyrova
Head of Corporate
Finance and Treasury Department
Daniyar Arkalyk
Deputy Head of Corporate
Finance and Treasury Department
Almas Sulaimanov
Expert of Corporate Finance
and Treasury Department
Nurzhan Dyussembinov
CFO,
KazTransGas Aimak
Aigolek Mamutova
CFO,
Intergas Central Asia
S T R I C T L Y P R I V A T E A N D C O N F I D E N T I A L
Primary Energy Consumption (quadrillion Btu)
MARKET OVERVIEW
4
China Demand for Gas (trillion cubic feet)
Shares of Primary Energy Europe Demand for Gas (trillion cubic feet)
0
150
300
450
600
750
900
2012 2020 2025 2030 2035 2040
(quadri
llio
n B
tu)
Oil Gas Coal Nuclear Other
Source:
1. U.S. Energy Information Administration, https://www.eia.gov/outlooks/ieo/ieo_tables.php
2. BP Statistical review of World Energy 2017 http://www.bp.com/content/dam/bp/pdf/energy-economics/energy-outlook-2017/bp-energy-outlook-2017.pdf, p. 14
Notes: (1) Energy consumption comprises commercially-traded fuels, including modern renewables used to generate electricity
0
5
10
15
20
25
30
2012 2020 2025 2030 2035 2040
(tri
llio
n c
ub
ic fe
et)
Gas Consumption Gas production
0
5
10
15
20
25
30
2012 2020 2025 2030 2035 2040
(tri
llio
n c
ub
ic fe
et)
Gas Consumption Gas Production
50%
40%
30%
20%
10%
0%
1965 1975 1985 1995 2005 2015 2025 2035
Nuclear
Renewables(1)
Oil
Gas
Coal
Hydro
S T R I C T L Y P R I V A T E A N D C O N F I D E N T I A L
KAZAKHSTAN GAS INDUSTRY
5
Kazakhstani Market Total Gas Volumes
Export and Domestic Consumption Volumes
15,1
17,2
2017
26.8 29 32.3
Production
Export Domestic market
91%
29%
27,2
5,1
Import
24,2
4,8
22,3
4,5
Import
KRG
TCOCNPC
Others
KRG
TCO
CNPC
Others
ImportKRG
TCO
CNPC
Others
Kashagan
Import
2015 2016 2017
15,2
13,7 90%
19%
2016
14,37
12,43
21%
92%
2015
S T R I C T L Y P R I V A T E A N D C O N F I D E N T I A L
Organizational structure
6
Government of the Republic of Kazakhstan (Baa3/BBB-/BBB)
JSC Sovereign Wealth Fund
“Samruk-Kazyna” (100%) (NR/BB+/BBB)
JSC National Company “KazMunayGas” (Baa3/BB-/BBB-)
JSC “KazTransGas” (100%) (Baa3/BB-/BBB-)
Amangeldy Gas (100%)KTG-Aimak
(100%)
KTG-Onimderi
(100%)
Intergas Central Asia
(100%)
JV Asian Gas Pipeline
(50%)
JV Beineu Shymkent Gas
Pipeline
(50%)
Gas and Gas Condensate
ProductionTrade and Gas Operations
Regional Gas Distribution
System
Main pipeline gas
transmissionService Companies
KazRosGas
50% under KTG’s management
National Bank of Kazakhstan (100%)
90.09% 9.91%
S T R I C T L Y P R I V A T E A N D C O N F I D E N T I A L
KazTransGas operations – Geographical advantage
7
Underground gas storages
Gas fields
Non-gasified Territories
Gasified Territories
Souyz-Orenburg-Novopskov
Capacity: 40,4 bln m3
Operator: ICA
Russian Transit
Chelyabinsk
Central Asia-Center
Capacity: 47,2 bln m3
Operator: ICA
Central Asian Transit and
Export to Russia/Europe
Bukhara-Ural
Capacity: 8,3 bln m3
Operator: ICA
Export to Russia and Uzbekistan
Beineu-Bozoy-Shymkent
Capacity: 10 bln m3
Operator: BSGP
Export to China and
Transportation to South Kazakhstan
Asian Gas Pipeline
Capacity: 50 bln m3
Operator: AGP
Transit and Export to China
BGR-TBA
Capacity: 8 bln m3
Operator: ICA
Export to China and Kyrgyzstan and
Import of Uzbek Gas
Gas processing plants
S T R I C T L Y P R I V A T E A N D C O N F I D E N T I A L
The export contract with PetroChina was signed for 5 bcm. From October
15 till December 31 exported gas volume was 1 bcm (as of now 2,8 bcm).
Kashagan field produced 2,7 bcm in 2017 vs. 0,2 in 2016. KazTransGas
has a long-term purchase-sale agreement (till 2042) with Kashagan
consortium for 100% produced gas.
AGP gas pipeline Line C throughput capacity reached 20 bcm. Total
Kazakhstan-China pipeline throughput capacity reached 50 bcm
BSGP gas pipeline reached its maximum throughput capacity of 10 bcm
in November 2017.
Increase of ICA domestic gas transportation tariff for 60%, regional
transportation tariffs for 14% and wholesale gas prices for 7%.
KazTransGas at a Glance in 2017
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Key developments Key Operating Indicators (bln m3)
Key Financial Indicators (US$m)
INDICATOR 2015 2016 2017
Export gas transportation 12.7 13.2 17.7
Domestic gas transportation 14.9 16.5 17.3
International transit 75.0 58.3 65.8
Domestic market sales 11.5 11.8 12.8
Export sales 2.6 4.3 5.0
INDICATOR 2015 2016 2017
Revenue 1 684 1 469 1 784
Net Debt 887 910 1 282
EBITDA 428 443 478
EBITDA Margin 25% 30% 27%
Net Debt/EBITDA (KZT) 3.2x 2.0x 2.7х
Revenue and EBITDA Breakdown by Activities
* Calculated before applying USD conversion
2017 EBITDARevenue
67%
27%
6%
Sales Transportation Other
42%
26%
21%
11%
Export sales Export transportation
Transit Internal market
S T R I C T L Y P R I V A T E A N D C O N F I D E N T I A L
Gas sales and tariffs
9
KazTransGas Domestic Gas Sales (bln m3) Regulated Tariffs (KZT per 1,000 m3)
KazTransGas Export Volumes (bln m3) Unregulated Tariffs (US$ for 1,000 of m3 per 100 km)
Transport, (excl. VAT) 2015 2016 2017
Domestic Tariffs 1 380 1 380 2 213
Gas storage, per calendar month
(excl. VAT)200 200 281
Regional transportation tariffs 2 288 3 955 4 527
Wholesale gas prices 12 159 13 457 14 635
Gas transportation, (excl. VAT) 2015 2016 2017
Russian tariff 2.0 2.0 2.0
For export (TCO) 3.2 5.0 5.0
For export (КТG) 3.2 5.0 5.0
Russian transit 2.0 2.0 2.0
Сentral Asia transit 1.7 1.7 2.0
2,6
4,35,0
0,0
2,0
4,0
6,0
2015 2016 2017
11,5 11,8
12,8
10,0
11,0
12,0
13,0
14,0
2015 2016 2017
S T R I C T L Y P R I V A T E A N D C O N F I D E N T I A L
Gas transportation
10
Total Main Transportation Volumes (bln m3) Domestic Gas Transportation (bln m3)
Export Gas Transportation (bln m3) International Transit (bln m3)
2,6 2,65,0
6,6 6,6
6,4
2,84,1
5,40,8
0,0
2,0
4,0
6,0
8,0
10,0
12,0
14,0
16,0
18,0
2015 2016 2017KTG KRG TCO Zhaikmunay
102,8
88,1
100,9
80,0
85,0
90,0
95,0
100,0
105,0
110,0
2015 2016 2017
15,0
16,517,3
10,0
12,0
14,0
16,0
18,0
2015 2016 2017
59,7
41,246,9
15,3
17,118,9
20,0
40,0
60,0
80,0
100,0
2015 2016 2017
ICA AGP
S T R I C T L Y P R I V A T E A N D C O N F I D E N T I A L
Key financial results: revenue
11
Revenue dynamics and composition (mln. KZT)
501 958
581 757
8 234 11 373 -20 304
111 155 -42 325 11 666
Total 2017 ExportTransportation
DomesticTransportation
TransitTransportation
Export Sales DomesticSales
Other revenue Total 2018
10%
8%
9%
34%
33%
6%
Export Transportation Domestic Transportation
Central Asian Transit Russian Transit
Export Sales Domestic SalesTotal revenues increased by 80 bln tenge or 16% YoY mainly due to:
• increased export volumes by 16%;
• higher export prices in 2017 vs. 2016 (higher Chines export price plus oil price effect);
• increase of ICA domestic tariff for 60%.
S T R I C T L Y P R I V A T E A N D C O N F I D E N T I A L
Key financial results: cost of sales
12
Cost of sale dynamics and composition (mln. KZT)
348 454
434 793
22 633
54 639 3 261 1 492 -729
782 4 262
Total 2017 Cost of gassold
Transportationcosts
Payroll DD&A Fuel gas andgas loses
Other taxes Other Total 2018
54%
22%
8%
7%
3%2% 4%
Cost of gas sold Transportation costs
Payroll DD&A
Fuel gas and gas loses Other taxes
OtherTotal cost of sales increased by 86 bln tenge or 25% YoY mainly due to:
• increased transportation costs by 140% as we pay transportation fees to our 2 JVs with CNPC (non-consolidated);
• increased cost of gas sold by 11% due to higher purchased volumes of gas (by 11%).
S T R I C T L Y P R I V A T E A N D C O N F I D E N T I A L
Borrower
(as of 31/12/2017)(1)
Currency of
loanUSD mln Comments
KTG US$ 750 Eurobond
KTG US$ 50 KMG
KTG KZT 115 KMG
ICA KZT 197 EBRD
KTG Aimak KZT 200 EBRD, DBK, EABD
KTG Aimak KZT 41 7.5% Bond
Total US$ 1353
Debt portfolio structure
13
Note(s): (1) FX rate as at 31/12/2017 KZT/US$ of 332.33 used
Debt, Revenue and Costs Breakdown by Currency (as of 31/12/2017)
Revenue Costs
52%48%
USD KZT
Long-term debt maturity profile (USD mln)
47%53%
Debt
129 155
56 56 56
899
0
100
200
300
400
500
600
700
800
900
1 000
2018 2019 2020 2021 2022 LT
59%
41%
80%
20%
S T R I C T L Y P R I V A T E A N D C O N F I D E N T I A L
CAPEX SUMMARY
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Capex (KZT bn)
Net Cash From Operations vs Capex (KZT bn)
41 5583
40 26
463 3
3
0
50
100
150
2015 2016 2017
Investment Capex Maintenance Capex Other Capex
84 84
132
80
125106
0
50
100
150
200
2015 2016 2017
Total Capex Net cash from operations
S T R I C T L Y P R I V A T E A N D C O N F I D E N T I A L
Growth projects
15
Increase of export capacity to China from 5 to 10 bcm Dividend pay-outs from AGP JV with CNPC (50% portion)
• Petro China's demand is 10 bcm of Kazakh gas per year;
• Current capacity for China is 5 bcm per annum;
• 3 additional compressor stations will give additional 5 bcm;
• Investment project cost is $300 mln (launch in 1Q 2019);
• Additional $1 bln in revenues from 2019.
• Loan 100% guaranteed by CNPC will be repaid in 2023;
• Dividends starting from 2020 (based on 2019 results);
• Maximum capacity of 55 bcm per annum will be reached in 2018;
• AGP Financial indicators in 2017: • Transmitted volumes: 38 bcm
• Revenue: $1,801 bln
• Net profit: $827 mln
• EBITDA = $1,295 bln
• EBITDA margin = 72%
174
12498
339311
0
100
200
300
400
2020 2021 2022 2023 2024
(mln
. U
SD
)
181
943
2 000
0
500
1 000
1 500
2 000
2 500
2017 2018 2019
(mln
. U
SD
)
Revenues from export to China