Kazanorgsintez PJSC published a quarterly report for the third quarter of 2019. The market capitalization of the Company amounted to 174.5 billion rubles as of 30 September 2019. Following the peaks from the end of 2018 to early 2019, this value in fact returned to the September’s level of the previous year.
It should be recalled that according to the reported data on Russian Accounting Standards (RAS), the revenues of Kazanorgsintez PJSC for the first 9 months of the year exceeded 58.2 billion rubles. This value remained virtually unchanged relative to the results for the same period of last year, demonstrating a slight decrease of 3%. However, the changes took place in the structure of commodity production. Thus, the share of polycarbonate sales in total decreased from 17.4 to 10.8%, and in absolute terms from 10.6 to 6.3 billion rubles. This was a result of the fall in prices and lower sales volumes.
Meanwhile, the share of Low Density Polyethylene (LDPE) increased from 18 to 19.9% (from 10.8 to 11.6 billion rubles in absolute terms). The share of High Density Polyethylene (HDPE) increased even more, from 49.9 to 54.6% (from 30.0 to 31.8 billion rubles in absolute terms). In 2019, Kazanorgsintez faced with the same severe drop in prices for HDPE just like polycarbonates. However, due to large volume of the HDPE market and owing to diversification of the product range, the Company managed to increase the sales in this regard. For reference, back in 2018 the Company obtained an international Certificate of Compliance with ISO 9080 for PE2NT11-9 grade, thus in 2019 new markets were opened for this product. And in April 2019 the Company commercialized the two grades of metallocene Linear Low Density Polyethylene at once.
Over a nine-month period this year, the production cost of outputs increased by 3.7%, up to 37.1 billion rubles. Traditionally, this value was affected by the increase in utilities cost. Thanks to energy efficiency improvement program the Company has managed to control the rate of this growth. The share of energy costs in the total cost structure increased by 0.3% only compared with the level of last year.
Another factor which contributed to the cost increase this year was an increase in labor costs. Accordingly, the share in cost increased from 8.7% of last year to 9.8%. And the wages fund over the first 9 months of this year amounted to almost 4.4 billion rubles. This is 24% more than last year’s 9 months period (560 million rubles in absolute terms). In the meantime, the average number of employees remained unchanged, and has comprised 8.3 thousand people. It should be recalled that throughout a year the wages were indexed by Kazanorgsintez twice: in August 2018 the average growth was 11%, and in July 2019 the salaries for the largest group of employees, blue-collar workers, were raised by 30%. Percentage of the increase in salaries for the specialists and middle-management staff at that time amounted from 3 to 10%.Over 9 months of 2019
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