On July 28, President Vladimir Putin "agreed" on the letter of Assistant Andrei Belousov: he suggested considering the withdrawal of super-profits from metallurgists, miners and chemists - for 14 companies to increase taxes and receive 513.66 billion rubles. On August 9, Belousov's letter became public, and the next day, presidential spokesman Dmitry Peskov explained: the president agreed that the government should work on this topic and submit proposals, taking into account the preservation of investment opportunities of companies on the list.
Interlocutor Vedomosti in the financial and economic block knows that the initiative of 500 billion rubles. - the author's idea of Belousov, and doubts its embodiment in the current conditions. At the expense of what measures it is proposed to fulfill the idea, Belousov does not say in a letter; profile ministries and departments should develop it.
The document provoked criticism of NLMK's owner Vladimir Lisin, who spoke on behalf of the Russian Steel Association (he heads it), and then the RUIE.
What the helper offers
Belousov believes that if the EBITDA margin is adjusted for oil and gas companies and companies from the list, the budget will receive more than 500 billion rubles from the latter. Due to the high tax burden (in large part this is the MET), the EBITDA margin of oil and gas companies fluctuates between 15% for Lukoil and 29% for Surgutneftegaz; NLMK has 26%, and Polyus has 59%. According to Belousov Putin, oil companies and Gazprom have a higher tax burden (13-50%) than metallurgists (4-17%). "Because of the external market conditions [in 2017], metallurgical, chemical, petrochemical and mining companies received a total of more than 1.5 trillion rubles. EBITDA, "he says: in world practice, the seizure of surplus revenues formed due to market conditions and not dependent on management actions extends to all resource sectors. Belousov's letter, several officials say, was received by the Ministry of Industry, Energy and the Ministry of Finance. Their representatives refused to comment on the letter.
In the Ministry of Industry and Trade metallurgists met with Deputy Minister Viktor Yevtukhov, there are no solutions, metallurgists are recommended to develop the least painful ways to withdraw excess profits, several participants said. Two more participants say that the list can be replenished by other gold miners and copper companies.
One of the meeting participants added that the Ministry of Industry and Trade asked the company to prepare explanations of how the initiative will affect investment programs, taxes, social investments. "The toughening of the tax burden for the metallurgical industry jeopardizes the implementation of Russia's strategic national goals," says one of the participants in the meeting at the Ministry of Industry and Trade.
And Lisin, commenting on the idea of Belousov, said that the measures he proposed would encourage inefficiency. Belousov's plan does not take into account how much the company invested earlier, returning money to production and increasing profitability, and how much it needs to invest in the future, Lisin notes: there is a risk of lower investment and competitiveness.
Several top managers from the Belousov List companies expressed a similar position in a conversation with Vedomosti. Those who invested in production, now get a higher profitability, explains one of them. He also advised to assess EBITDA not in one year, but for a few, in order to understand the impact of the market on profitability. Important is the share of foreign assets in business, exports in revenue and so forth, says another top manager.
The RSPP pointed out errors in Belousov's calculations. Not all companies from the list extract minerals, not all get gas at a reduced price, there are drawbacks in the proposal of Belousov, the company's top manager from the list.
What scared the ruble
Andrey Belousov's proposal to withdraw "super profits" from metallurgical and chemical companies added nervousness to the already troubled Russian market. Since Wednesday, investors have sold Russian assets, and the Russian ruble has significantly fallen in price.
Since Wednesday, the ruble has lost 6.7% against the dollar and 4.9% against the euro. The ruble began to fall after it became known what kind of restrictive measures the US is willing to take against Russia because of its alleged interference in the elections. Congress proposes to prohibit the purchase of a new Russian national debt, as well as to block dollar settlements of seven Russian banks, including VTB and Sberbank. For Wednesday, the ruble lost 2-2.5 rubles: by the close of trading, the dollar was worth 65.55 rubles, and the euro - 76.13 rubles.
The collapse continued on Thursday, after the US Treasury announced upcoming sanctions in connection with the poisoning of former Colonel GRU Sergei Skripal and his daughter in the British Salisbury. The US intends to limit the export of goods to Russia from August 22, which can be used in the defense industry. If Russia does not provide evidence that it does not use biological and chemical weapons, the US can reduce the level of diplomatic relations in three months and restrict Aeroflot flights to America.
And about the proposal of presidential assistant Andrei Belousov to withdraw 514 billion rubles. "Super profits" became known on Thursday evening, and by the evening of Friday, the dollar's rate rose to 67.72 rubles, the euro to 77.25 rubles, and the Moscow Stock Exchange index fell 1.6% to 2,275 points. Significantly, the shares of companies from the "Belousov list" - NLMK (-5,4%), "Polyus" (-5,3%), "Alrosy" (-4,8%) also fell in price.
Defining the negative factor of the next week will remain the topic of US sanctions, says Dmitry Kharlampiev, director of analytics at the corporate-investment block of the FC Otkritie Bank, and Belousov's initiative is additional.
The proposal of the presidential aide was, to put it mildly, inopportune, says the head of the analysis of the markets of the Ingosstrakh investment management company Valentin Zhurba: it added volatility to Russian assets.
If there is confirmation that the Russian authorities are seriously considering such a scenario, this will provoke the exit of foreign investors from the shares of metallurgical companies, says Natalia Orlova, chief economist at Alfa Bank: "In conditions when they have nowhere to shift, non-residents will leave the Russian market, which will affect on the ruble. " A significant negative factor is the continuing sale in OFZ, Kharlampiev recalls: the yields of securities since the duration of about 3.7 years have risen above 8%, and in the far segment - above 8.3%. An additional factor of concern for investors will be the devaluation of the Turkish lira, warns Orlova.
The Central Bank may support the ruble. To do this, the regulator has all the necessary tools, the Central Bank reminded on Friday: in particular, to limit volatility, the amount of daily purchases of currency in favor of the Ministry of Finance can be adjusted. On August 9, the Central Bank sent 8.4 billion rubles for these purposes. - instead of the planned 16.7 billion.
The dynamics of the foreign exchange market in the Central Bank was considered a natural reaction to news about sanctions and reminded that such situations already arose and were temporary. In April 2017, there was a local devaluation of the ruble - by about 13% against the dollar, Kharlampiev said, now the situation is different - only about 6.5%: while it is more about fears, not about the implementation of risks.
Next week, the rate may make attempts to return to the level of 65 rubles. for the dollar, predicts investment strategist "BCS premiere" Alexander Bakhtin. However, it is possible that the dollar may temporarily consolidate in the range of 65-67 rubles, he concludes.
The first consequences
Of the 14 Belousov list companies, nine are public, they are proposed to withdraw 349 billion rubles. For Friday, they lost 392 billion rubles on the London, New York and Moscow stock exchanges: NLMK's capitalization fell by 7.92%, or by 75.5 billion rubles. ($ 1.138 billion), Alrosa by 4.8%, or by 64.8 billion ($ 978 million), Evraz by 8.99%, or by 64.1 billion ($ 967 million), Norilsk Nickel - by 3.55%, or by 60.8 billion ($ 917 million).
The share of companies from the Belousov sectors listed in the MICEX index is about 16%. An increase in the fiscal burden on them will lead to lower profits, a loss of financial stability and a significant outflow of investors from securities with a one-time reduction in the capitalization of the Russian stock market to 3 trillion rubles. and up to 10% of the capitalization, was calculated in the company from the "Belousov list".
The top manager of another such company admitted that it is possible to execute any program theoretically, and the question of Belousov's goal remains: "If the goal is to finish off the last branches in the country and it makes no sense to lose some more money, the plan of the presidential aide is good."
"The drop in the market that occurred on August 10 is nonsense. If Belousov's plan is fulfilled, the market will fall by 30-40%, "- warns the head of the analytical department of BCS Cyril Chuiko.
The strongest of all Belousov's plan will be suffered by Norilsk Nickel, Alrosa and Polyus, as their EBITDA margins are 25-30%, which is higher than that of other companies on the list, Renaissance Capital experts calculated: their total losses in the case the adoption of the program can make about $ 3.6 billion EBITDA and lead to a fall in the market value of Polyus by 10%, Alrosa by 9.2%, Norilsk Nickel by 6.5%.
The significance of Belousov's working analytical note is incorrectly overestimated, the federal official notes: "Belousov is responsible for the execution of national projects, his job is to find money, he does analytics in the presidential administration, what additional sources of funding there are or theoretically could be." This note is not much different from a hundred similar ones, the official assures, and the decision to "work out" in the official language means nothing, in fact, this is what Peskov and the first deputy chairman of the government, Finance Minister Anton Siluanov, officially say about it.
Methodological problems
"Belousov is a cautious apparatchik, but it is not clear whether he discussed his proposal with someone before he was officially introduced. Perhaps he has already secured support at the highest level, "said political analyst Abbas Gallamiov. Based on what parameters Belousov selected companies - this question asked the leaders of all companies from the letter, they say interlocutors "Vedomosti" in these companies. The federal official explains that the company list is included as an example, for comparison.
Rosneft received 92.4% of EBITDA (1.2 trillion rubles) from oil sales last year, and the remaining (180 billion) - from the sale of oil products. Lukoil 68% EBITDA (569 billion) was received from the sale of oil, oil products brought 31% (263.4 billion). The share of the mineral extraction tax in the costs of Rosneft and Lukoil is 34 and 11%, respectively.
The main benefit metallurgists receive from the products of high conversion - rolled. In order to produce it, it is necessary to extract ore, enrich it (iron ore - exchange commodity), to melt with the addition of a mixture of ferroalloys, to melt hot-rolled steel, and then to cold-rolled (sheet) rolling.
The extracting segments of NLMK and Severstal brought companies last year 24 and 31% EBITDA, respectively ($ 642 million and $ 812 million), the remaining 64 and 68% ($ 1.72 billion and $ 1.76 billion) - sales of rolled metal and construction. Iron ore currently stands at about $ 69 for 1 ton, hot-rolled steel - an average of $ 360, and the cold-rolled Severstal sold in 2017 at $ 468 per 1 ton. Metallurgists are also paying MET, this is a big part of the line "Other taxes," says employee of a major rating agency, the share of the mineral extraction tax on production costs for NLMK and Severstal is 1.17 and 1.5%, respectively.
Chuiko stresses that the MET although is not high for the metallurgical industry, but is pawned in the calculation of the cost price, and with inaccurate handling of this tax, the cost price can suffer greatly, and competitiveness, primarily in the foreign market, depends on it.
Interlocutor Vedomosti in the financial and economic block knows that the initiative of 500 billion rubles. - the author's idea of Belousov, and doubts its embodiment in the current conditions. At the expense of what measures it is proposed to fulfill the idea, Belousov does not say in a letter; profile ministries and departments should develop it.
The document provoked criticism of NLMK's owner Vladimir Lisin, who spoke on behalf of the Russian Steel Association (he heads it), and then the RUIE.
What the helper offers
Belousov believes that if the EBITDA margin is adjusted for oil and gas companies and companies from the list, the budget will receive more than 500 billion rubles from the latter. Due to the high tax burden (in large part this is the MET), the EBITDA margin of oil and gas companies fluctuates between 15% for Lukoil and 29% for Surgutneftegaz; NLMK has 26%, and Polyus has 59%. According to Belousov Putin, oil companies and Gazprom have a higher tax burden (13-50%) than metallurgists (4-17%). "Because of the external market conditions [in 2017], metallurgical, chemical, petrochemical and mining companies received a total of more than 1.5 trillion rubles. EBITDA, "he says: in world practice, the seizure of surplus revenues formed due to market conditions and not dependent on management actions extends to all resource sectors. Belousov's letter, several officials say, was received by the Ministry of Industry, Energy and the Ministry of Finance. Their representatives refused to comment on the letter.
In the Ministry of Industry and Trade metallurgists met with Deputy Minister Viktor Yevtukhov, there are no solutions, metallurgists are recommended to develop the least painful ways to withdraw excess profits, several participants said. Two more participants say that the list can be replenished by other gold miners and copper companies.
One of the meeting participants added that the Ministry of Industry and Trade asked the company to prepare explanations of how the initiative will affect investment programs, taxes, social investments. "The toughening of the tax burden for the metallurgical industry jeopardizes the implementation of Russia's strategic national goals," says one of the participants in the meeting at the Ministry of Industry and Trade.
And Lisin, commenting on the idea of Belousov, said that the measures he proposed would encourage inefficiency. Belousov's plan does not take into account how much the company invested earlier, returning money to production and increasing profitability, and how much it needs to invest in the future, Lisin notes: there is a risk of lower investment and competitiveness.
Several top managers from the Belousov List companies expressed a similar position in a conversation with Vedomosti. Those who invested in production, now get a higher profitability, explains one of them. He also advised to assess EBITDA not in one year, but for a few, in order to understand the impact of the market on profitability. Important is the share of foreign assets in business, exports in revenue and so forth, says another top manager.
The RSPP pointed out errors in Belousov's calculations. Not all companies from the list extract minerals, not all get gas at a reduced price, there are drawbacks in the proposal of Belousov, the company's top manager from the list.
What scared the ruble
Andrey Belousov's proposal to withdraw "super profits" from metallurgical and chemical companies added nervousness to the already troubled Russian market. Since Wednesday, investors have sold Russian assets, and the Russian ruble has significantly fallen in price.
Since Wednesday, the ruble has lost 6.7% against the dollar and 4.9% against the euro. The ruble began to fall after it became known what kind of restrictive measures the US is willing to take against Russia because of its alleged interference in the elections. Congress proposes to prohibit the purchase of a new Russian national debt, as well as to block dollar settlements of seven Russian banks, including VTB and Sberbank. For Wednesday, the ruble lost 2-2.5 rubles: by the close of trading, the dollar was worth 65.55 rubles, and the euro - 76.13 rubles.
The collapse continued on Thursday, after the US Treasury announced upcoming sanctions in connection with the poisoning of former Colonel GRU Sergei Skripal and his daughter in the British Salisbury. The US intends to limit the export of goods to Russia from August 22, which can be used in the defense industry. If Russia does not provide evidence that it does not use biological and chemical weapons, the US can reduce the level of diplomatic relations in three months and restrict Aeroflot flights to America.
And about the proposal of presidential assistant Andrei Belousov to withdraw 514 billion rubles. "Super profits" became known on Thursday evening, and by the evening of Friday, the dollar's rate rose to 67.72 rubles, the euro to 77.25 rubles, and the Moscow Stock Exchange index fell 1.6% to 2,275 points. Significantly, the shares of companies from the "Belousov list" - NLMK (-5,4%), "Polyus" (-5,3%), "Alrosy" (-4,8%) also fell in price.
Defining the negative factor of the next week will remain the topic of US sanctions, says Dmitry Kharlampiev, director of analytics at the corporate-investment block of the FC Otkritie Bank, and Belousov's initiative is additional.
The proposal of the presidential aide was, to put it mildly, inopportune, says the head of the analysis of the markets of the Ingosstrakh investment management company Valentin Zhurba: it added volatility to Russian assets.
If there is confirmation that the Russian authorities are seriously considering such a scenario, this will provoke the exit of foreign investors from the shares of metallurgical companies, says Natalia Orlova, chief economist at Alfa Bank: "In conditions when they have nowhere to shift, non-residents will leave the Russian market, which will affect on the ruble. " A significant negative factor is the continuing sale in OFZ, Kharlampiev recalls: the yields of securities since the duration of about 3.7 years have risen above 8%, and in the far segment - above 8.3%. An additional factor of concern for investors will be the devaluation of the Turkish lira, warns Orlova.
The Central Bank may support the ruble. To do this, the regulator has all the necessary tools, the Central Bank reminded on Friday: in particular, to limit volatility, the amount of daily purchases of currency in favor of the Ministry of Finance can be adjusted. On August 9, the Central Bank sent 8.4 billion rubles for these purposes. - instead of the planned 16.7 billion.
The dynamics of the foreign exchange market in the Central Bank was considered a natural reaction to news about sanctions and reminded that such situations already arose and were temporary. In April 2017, there was a local devaluation of the ruble - by about 13% against the dollar, Kharlampiev said, now the situation is different - only about 6.5%: while it is more about fears, not about the implementation of risks.
Next week, the rate may make attempts to return to the level of 65 rubles. for the dollar, predicts investment strategist "BCS premiere" Alexander Bakhtin. However, it is possible that the dollar may temporarily consolidate in the range of 65-67 rubles, he concludes.
The first consequences
Of the 14 Belousov list companies, nine are public, they are proposed to withdraw 349 billion rubles. For Friday, they lost 392 billion rubles on the London, New York and Moscow stock exchanges: NLMK's capitalization fell by 7.92%, or by 75.5 billion rubles. ($ 1.138 billion), Alrosa by 4.8%, or by 64.8 billion ($ 978 million), Evraz by 8.99%, or by 64.1 billion ($ 967 million), Norilsk Nickel - by 3.55%, or by 60.8 billion ($ 917 million).
The share of companies from the Belousov sectors listed in the MICEX index is about 16%. An increase in the fiscal burden on them will lead to lower profits, a loss of financial stability and a significant outflow of investors from securities with a one-time reduction in the capitalization of the Russian stock market to 3 trillion rubles. and up to 10% of the capitalization, was calculated in the company from the "Belousov list".
The top manager of another such company admitted that it is possible to execute any program theoretically, and the question of Belousov's goal remains: "If the goal is to finish off the last branches in the country and it makes no sense to lose some more money, the plan of the presidential aide is good."
"The drop in the market that occurred on August 10 is nonsense. If Belousov's plan is fulfilled, the market will fall by 30-40%, "- warns the head of the analytical department of BCS Cyril Chuiko.
The strongest of all Belousov's plan will be suffered by Norilsk Nickel, Alrosa and Polyus, as their EBITDA margins are 25-30%, which is higher than that of other companies on the list, Renaissance Capital experts calculated: their total losses in the case the adoption of the program can make about $ 3.6 billion EBITDA and lead to a fall in the market value of Polyus by 10%, Alrosa by 9.2%, Norilsk Nickel by 6.5%.
The significance of Belousov's working analytical note is incorrectly overestimated, the federal official notes: "Belousov is responsible for the execution of national projects, his job is to find money, he does analytics in the presidential administration, what additional sources of funding there are or theoretically could be." This note is not much different from a hundred similar ones, the official assures, and the decision to "work out" in the official language means nothing, in fact, this is what Peskov and the first deputy chairman of the government, Finance Minister Anton Siluanov, officially say about it.
Methodological problems
"Belousov is a cautious apparatchik, but it is not clear whether he discussed his proposal with someone before he was officially introduced. Perhaps he has already secured support at the highest level, "said political analyst Abbas Gallamiov. Based on what parameters Belousov selected companies - this question asked the leaders of all companies from the letter, they say interlocutors "Vedomosti" in these companies. The federal official explains that the company list is included as an example, for comparison.
Rosneft received 92.4% of EBITDA (1.2 trillion rubles) from oil sales last year, and the remaining (180 billion) - from the sale of oil products. Lukoil 68% EBITDA (569 billion) was received from the sale of oil, oil products brought 31% (263.4 billion). The share of the mineral extraction tax in the costs of Rosneft and Lukoil is 34 and 11%, respectively.
The main benefit metallurgists receive from the products of high conversion - rolled. In order to produce it, it is necessary to extract ore, enrich it (iron ore - exchange commodity), to melt with the addition of a mixture of ferroalloys, to melt hot-rolled steel, and then to cold-rolled (sheet) rolling.
The extracting segments of NLMK and Severstal brought companies last year 24 and 31% EBITDA, respectively ($ 642 million and $ 812 million), the remaining 64 and 68% ($ 1.72 billion and $ 1.76 billion) - sales of rolled metal and construction. Iron ore currently stands at about $ 69 for 1 ton, hot-rolled steel - an average of $ 360, and the cold-rolled Severstal sold in 2017 at $ 468 per 1 ton. Metallurgists are also paying MET, this is a big part of the line "Other taxes," says employee of a major rating agency, the share of the mineral extraction tax on production costs for NLMK and Severstal is 1.17 and 1.5%, respectively.
Chuiko stresses that the MET although is not high for the metallurgical industry, but is pawned in the calculation of the cost price, and with inaccurate handling of this tax, the cost price can suffer greatly, and competitiveness, primarily in the foreign market, depends on it.
Business
- Lisin Vladimir
- Belousov Andrey
- Evraz
- Alrosa
- Magnitogorsk Iron and Steel Works
- Severstal
- Eurochem
- Sibur
- Metalloinvest
- NLMK
- Akron
- Administration of the President of Russia
- Phosagro
- Uralchim
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