Fitch Ratings has revised PJSC Russneft's Outlook to Positive from Stable; while affirming the Rating at 'B', according to the Agency.
The Outlook revision reflects Russneft's decreasing leverage, driven by improved per-barrel profitability on the back of higher oil prices and more production coming from depleted and hard-to-recover reserves, Fitch said.
Russneft's funds from operations net leverage (adjusted for operating leases and including long-term prepayments and preferred stock) fell to 3.4x in 2018 from 4.8x in 2017.
Fitch analysts believe that in the future Russneft should be able to generate moderately positive free cash flow (FCF). They also expect that the so-called 'tax maneuver' undertaken by the Russian state will not have material consequences for the company.
