NOVATEK PJSC Primary Credit Analyst: Elena Anankina, CFA, Moscow + 7 49 5783 4130;
[email protected] Secondary Contact: Alexander Griaznov, Moscow + 7 49 5783 4109;
[email protected] Table Of Contents Credit Highlights Outlook Our Base-Case Scenario Company Description Peer Comparison Business Risk Financial Risk Liquidity Environmental, Social, And Governance Rating Above The Sovereign Issue Ratings - Subordination Risk Analysis Ratings Score Snapshot Related Criteria S&P GLOBAL RATINGS360 APRIL 2, 2021 1 © S&P Global Ratings. All rights reserved. No reprint or dissemination without S&P Global Ratings' permission. See Terms of Use/Disclaimer on the last page. Table Of Contents (cont.) Related Research S&P GLOBAL RATINGS360 APRIL 2, 2021 2 © S&P Global Ratings. All rights reserved. No reprint or dissemination without S&P Global Ratings' permission. See Terms of Use/Disclaimer on the last page. NOVATEK PJSC Business Risk: SATISFACTORY Issuer Credit Rating Vulnerable Excellent a- bbb bbb BBB/Stable/-- Financial Risk: MINIMAL Highly leveraged Minimal Anchor Modifiers Group/Gov't Russia National Scale NR/--/-- Credit Highlights Overview Key strengths Key risks Low leverage, with RUB222.1 billion of reported debt at year-end 2020, and High consolidated capital expenditure (capex), with about funds from operations (FFO) to debt above 60% in our base-case scenario RUB200 billion planned for 2021 Very low cost position Large LNG investment ambitions, where financing and project structure are yet to be confirmed Stable quasi-utility domestic gas business Increasing oil and gas industry risks from energy transition, including price volatility and growing ESG pressures Healthy profitability of joint ventures (notably Yamal LNG), and non-recourse Current U.S.