Analysts at Sberbank CIB issued a closed report to customers, which severely criticized the strategy of Rosneft, and also stressed the role of its CEO Igor Sechin in making decisions aimed at further expensive and inefficient expansion of the company in the oil industry and beyond. Rosneft's press secretary Mikhail Leontyev found that "the people who prepared the report are on the verge of pathology." Sberbank's press service later said that the report was prepared with "violations of the accepted quality standards," and "an updated version was issued."
About two weeks ago, Sberbank CIB analysts sent a report to their institutional investors, a large part of which was devoted to the analysis of Rosneft and its investment attractiveness. In the chapter titled "We need to talk about Igor," analysts have examined the dynamics of the company's financial and operating performance since the arrival of Igor Sechin as its leader. The main idea was that the current positive view of the market for Rosneft is not justified, since it implies a reduction in debt and capital investments in the coming years. However, according to Sberbank CIB analysts, this is unlikely, as "the refusal of further expansion and debt reduction does not suit the CEO of Rosneft." "Assuming that he will keep his post, his current weight will push him out of Russia, and perhaps further away from the oil industry," they wrote.
The report noted that in recent years, Rosneft spent $ 22 billion on acquisitions, buying assets above fair value and increasing debt, although after buying TNK-BP investors expected that the company will begin to reduce its debt. In addition, the company has consistently increased its investment program, and both capital and operating expenses are substantially growing (the section was called "The Myth of the Effectiveness of Rosneft"). According to analysts of Sberbank CIB, Mr. Sechin's personal convictions and his way of thinking do not allow us to hope that in the near future the company will depart from concentration on expansion, and in this case it is impossible to expect the growth of dividend yield to 9% by 2020, as the market predicts .
Analysts noted that "our financial expectations (for Rosneft .-" Kommersant) are not so far from consensus, the only difference is that we do not believe in them completely. "
"In order to take a neutral or, especially, bullish position on Rosneft's shares," they need, "they continued," so that many things are formed right, first of all, in the head of one person - we are still not ready to believe it. " In addition, in separate sections of the report, the authors emphasized the inefficiency or excess cost of the Rosneft gas program, the refinery modernization program, the development of gas chemistry, and noted the unusual way of preparing financial statements, especially in reflecting the real cost of prepayments for oil supplies to China , which makes this reporting "somewhat misleading".
The press service of Sberbank told Kommersant that "the text of the review on the oil and gas sector of Sberbank Investment Research, which has spread and is being discussed in social networks, does not correspond to the current version of the report," and the first version "was issued in violation of the accepted quality standards for Sberbank CIB analysts" . "Inconsistencies to these standards were found in Sberbank Investment Research independently, after which an adjusted version was issued," the representative of Sberbank said.
However, according to Kommersant's information, the corrected version of the report was hurriedly prepared today: it was decided to remove several phrases and a section about the personal qualities of Mr. Sechin.
Rosneft spokesman Mikhail Leontiev believes that "analysts of Sberbank CIB traditionally harbor an inexplicable and maniacal addiction to our company, which is obvious to any outside observer," adding that "the reporters who prepare the report are on the verge of pathology." "I would very much like the leadership of the system-forming bank of Russia to render them all possible assistance," Mr. Leontiev said.
Kommersant's interlocutors in the market note that the analytical team of Sberbank CIB, which is based on former analysts of Troika Dialog, has always been known on the market for its independence and ability to make harsh judgments, which was highly valued by investors. They add that various conflicts and "grievances" have happened more than once, but so far this has not affected the independence of the team in any way.