KMG's revenue for Q1 2026 amounted to KZT 2.48 trillion (+11% YoY). Growth was driven by higher oil and petroleum product prices. Revenue from crude oil and gas sales increased by 9.8% YoY to KZT 1.37 trillion, while petroleum product revenue rose by 12% YoY to KZT 848 billion. At the same time, oil and gas condensate production declined by 12% YoY to 5.65 million tonnes due to temporary disruptions at Tengiz and CPC. Total revenue, including other income, reached KZT 2.74 trillion (+11% YoY).

Adjusted EBITDA increased by 6.8% YoY to KZT 591 billion, while the EBITDA margin improved to 23.7% from 23.1% a year earlier. Net profit nearly doubled to KZT 368 billion (+94% YoY), supported by stronger operating performance, lower financial expenses, and the absence of significant asset write-downs.

Free cash flow amounted to negative KZT 78 billion compared to positive KZT 283 billion a year earlier. The negative result was mainly driven by a KZT 504 billion increase in accounts receivable and a 64% YoY rise in capital expenditures. At the same time, leverage remains among the lowest in the sector, with Net Debt/EBITDA at around 0.3x, while the company's cash buffer stands at approximately KZT 2.9 trillion.

We view the report as neutral: financial performance improved primarily due to higher oil prices, while operating volumes temporarily declined. The disruptions at Tengiz and CPC have already been resolved, and dividends from joint ventures are expected to support cash flow in Q2. Following the model update, the target price was revised down to KZT 39,100, implying an upside potential of approximately 21%. Recommendation: Buy.

In the oil production of the Republic of Kazakhstan

In the transportation of oil of the Republic of Kazakhstan

In oil refining of the Republic of Kazakhstan

Assets to GDP of the Republic of Kazakhstan

The price of accommodation

Target price

Current growth potential