Gazprom Neft reports 26 percent year-on-year increase in net profit for 2017

06 February 2018

Company publishes preliminary consolidated financial accounts (IFRS) for the 12 months ended 31 December 2017

  • Anticipated net profit for 2017 – RUB253 billion, up 26.5 percent year-on-year.
  • Anticipated adjusted EBITDA* for 2017 – RUB551 billion, up 20.8 percent yearon-year.
  • Anticipated free cash flow (FCF) for 12 months of 2017 – RUB65 billion.

Gazprom Neft today publishes preliminary consolidated IFRS financial statements for the 12 months ended 31 December 2017.

Company revenue including duties (sales) for the 12 months ended 31 December 2017 is expected to reach RUB2 trillion, an increase of more than 18 percent year-on-year. Adjusted EBITDA (earnings before interest, tax, depreciation and amortization) is likely to reach RUB551 billion – up 20.8 percent year-on-year. Net profit attributable to Gazprom Neft PJSC shareholders for the 12 months of 2017 is expected to reach RUB253 billion, up 26.5 percent year-on-year. This growth in key financial metrics in 2017 is due to improved market conditions, the successful development of new initiatives in hydrocarbon production and in increasing retail sales, and effective management initiatives.

Improved operating cash flow and the completion of key infrastructure investments at new upstream projects resulted in free cash flow increasing to RUB65 billion in 2017.

Hydrocarbon production including Gazprom Neft’s share in production at joint ventures reached 89.75 million tonnes of oil equivalent in 2017, an increase of 4.1 percent year-onyear. This growth was attributable to increased production at new assets including the Novoportovskoye, Messoyakhskoye and Prirazlomnoye fields, as well as increasing production in Iraq.

Annual refining volumes at the company’s own and jointly-owned facilities totalled 40.1 million tonnes. Optimum throughput at the company’s refineries ensured that the company achieved maximum profitability despite the current market conditions. At the same time, sales of oil products through the company’s filling station network reached more than 11 million tonnes, with retail sales up 5.6 percent year-on-year.

Commenting on the company’s results for 2017, Alexander Dyukov, Chairman of the Management Board, Gazprom Neft PJSC, said: “2017 was a record financial year for Gazprom Neft, with the company achieving the highest net profit in its history. The company’s operating cash flow throughout last year stood at RUB422 billion – another record. This performance is the result of our commitment to achieving the company’s overriding objective, of becoming a global market leader in terms of our financial and operational performance.” 

Financial Highlights

12m
2017

12m
2016

Δ, %

Sales (RUB billions)2,0041,69618.2
EBITDA (RUB billions)48940221,6
Adjusted EBITDA* (RUB billions)55145620.8
USD / barrels o.e.
14.1910.6333.5

Profit attributable to Gazprom Neft
shareholders (RUB billions)

25320026.5
Operating cash flow42232131.3
Free cash flow65(64)-
Net debt / EBITDA1.191.60(25.6)

Key Operational Indicators

12m
2017

12m
2016

Δ, %

Hydrocarbon production
including our share of
joint ventures (mboe)
665.38640.173.9
Hydrocarbon production
including our share
of joint ventures (mtoe)
89.7586.208.2
Refining throughput at own
refineries and joint ventures
(million tonnes)
40.1141.89(4.2)
Sales through premium
channels (million tonnes)
26.1325.163.9
Sales through filling
stations (million tonnes)
11.0410.455.6

Proven reserves including
Gazprom Neft shares in
joint ventures (PRMS, mboe)

11,28011,2180.6

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