Gazprom Neft reports profit growth of more than 28 percent year-on-year in the first nine months of 2017

15 November 2017

Gazprom Neft today publishes consolidated financial accounts (IFRS) for Q3 2017 and the nine months ended 30 September 2017.

  • Net profit of RUB189 billion for the first nine months of 2017 – an increase of 28.2 percent year-on-year, driven by effective management initiatives and organic growth.
  • Adjusted EBITDA* up 22.9 percent year-on-year for the first nine months of 2017, at RUB399 billion.
  • Free cash flow (FCF) of RUB83 billion for the first nine months of 2017.

In the first nine months of 2017, Gazprom Neft achieved revenue (including duties (sales)) of RUB1,458 billion, an increase of 19.3 percent year-on-year. The company recorded 22.9 percent year-on-year growth in its adjusted EBITDA, to RUB399 billion, attributable to the successful development of new hydrocarbon production projects, growth in retail sales, and the recovery of the oil price and the price of oil products, alongside effective management initiatives. 9M 2017 net profit attributable to shareholders is RUB189 billion, an increase of 28.2 percent year-on-year.

Free cash flow for the 9M 2017 totaled RUB83 billion, supported by increased cash flow from operations and the completion of key infrastructure investments in new upstream projects.

Hydrocarbon production for 9M 2017, including Gazprom Neft’s share in joint ventures, reached 67.05 million tonnes of oil equivalent (mtoe), an increase of 5.6 percent year-on-year. This growth reflected increased production at new assets, including the Novoportovskoye, Messoyakhskoye and Prirazlomnoye fields, as well as in Iraq.

Refining volumes in 9M 2017 declined in line with the company’s production plan, to accommodate major, planned maintenance works at the company’s refining facilities. Retail sales grew 6.3 percent, with more than 8.1 million tonnes of oil products sold through the company’s petrol station network in the first nine months of 2017.

Commenting on the Q3 and nine-month results, Alexander Dyukov, Chairman of the Gazprom Neft Management Board, said: “Gazprom Neft continues to demonstrate solid growth in its financial results driven by progress on new projects, an improved pricing environment and effective management. The company is continuing to implement a growth strategy aimed at further strengthening its position as an industry leader in efficiency and return on investment. In the first nine months of 2017 we have achieved record free cash flow, enabling us to further improve our dividend yield and grow shareholder value.

 Financial Indicators

3Q
2017

2Q
2017

Δ, %

9m
2017

9m
2016

Δ, %

Sales (RUB, m)

513,251

475,668

7.9

1,457,525

1,221,326

19.3

EBITDA (RUB, m)

136,915

114,361

19.7

355,131

287,861

23.4

Adjusted EBITDA* (RUB, m)

153,439

128,013

19.9

399,246

324,869

22.9

USD / boe

15.23

13.69

11.2

13.77

10.07

36.7

Income attributable to
Gazprom Neft PJSC
shareholders (RUB, m)

77,731

49,316

57.6

189,000

147,480

28.2

Cash flow from operations

144,653

115,973

24.7328,781235,61438.3
Net debt / EBITDA

1.27

1.37

(7.3)1.271.78(28.7)

 

Key Operational Indicators

3Q
2017

2Q
2017

Δ, %

9m
2017

9m
2016

Δ, %

Hydrocarbon production
including our share of joint
ventures (Mmboe)

170.72

163.61

4.3

497.10

471.89

5.3

Hydrocarbon production
taking into account our share of joint
ventures (Mmtoe)

23.03

22.074.367.0563.525.6

Volume of processing
at own refineries and
joint venture refineries (Mt)

11.12

9.95

11.8

29.85

31.21

(4.4)

Sales through premium
channels (Mt)

7.30

6.51

12.1

19.37

18.74

3.4

Sales through retail
network (Mt)

2.91

2.72

7.0

8.14

7.66

6.3

 

* Adjusted EBITDA includes share of EBITDA from associated and jointly controlled companies recorded by equity accounting method