Gazprom Neft 9M 2018 net profit up 58 percent

16 November 2018
  • RUB298.7 billion Gazprom Neft’s net profit for 9M 2018, a 58-percent increase on 9M 2017;
  • RUB614.5 billion adjusted EBITDA* for the first nine months of 2018 – up 53.9 percent on 9M 2017;
  • Free cash flow (FCF) for 9M 2018, standing at RUB134.8 billion, a 62.4-percent increase year-on-year.

Gazprom Neft announces its consolidated financial accounts (IFRS) for 9M/3Q 2018.

Revenue in the first nine months of 2018 amounted to one trillion, 827.3 billion rubles (RUB1,827,300,000,000), representing a 29.8 percent increase year-on-year.** Adjusted EBITDA demonstrated a more than 1.5-fold increase year-on-year, to RUB614.5 billion.* This increase reflects positive changes in oil prices on the global and domestic markets, the successful development of new upstream projects, as well as greater operational efficiency. Net profit attributable to PJSC Gazprom Neft shareholders totalled RUB298.7 billion for 9M 2018, an increase of 58 percent year-on-year.

Significant growth in the Company’s operational cash flow, together with the completion of key investments in infrastructure at new upstream projects, resulted in a positive free cash flow of RUB134.8 billion for 9M 2018.

Hydrocarbon production in 9M 2018, including Gazprom Neft’s share in production at joint ventures, increased by 2.8 percent year-on-year to 68.9 million tonnes of oil equivalent (mtoe), driven by higher production volumes at new fields, and Gazprom Neft’s increased interest in Arcticgas. The unit cost of hydrocarbon production in ruble terms saw a 5.2-percent reduction year-on-year, the result of optimising cost control at mature fields.

Refining volumes at Gazprom Neft’s own and joint-venture refineries during the period totalled 31.8 million tonnes, an increase of 6.6 percent year-on-year, following the completion of a planned refinery maintenance in 2017. The Company also increased its light petroleum product yield faster than expected, particularly with regard to production of high-octane gasoline and diesel fuels, as well as jet fuel. Sales volumes of oil products through premium

distribution channels increased by 4.6 percent year-on-year, amounting to 20.3 million tonnes.

Alexander Dyukov, Chairman of the Management Board of Gazprom Neft, commented: “The Company has maintained its focus on improving the efficiency of its business processes and operations – reducing unit costs in oil production, increasing the daily production, further improving refining depth, and increasing the light product yield. Our performance across our key financial indicators is up by more than 50 percent over the first nine months of this year, and free cash flow has increased more than 1.5-fold. This consistent improvement in our financial and operational performance means Gazprom Neft has every justification for increasing dividend payments, and for further enhancing shareholder value.”

 Financial Indicators

3Q
2018
2Q
2018
Δ, %9m
2018
9m
2017
Δ, %
Revenues (RUB millions)689,557617,10311.71,827,2931,407,85629.8
Revenues
after excise duties
(RUB, millions)***
714,662639,59211.71,895,4561,457,52530.0
EBITDA (RUB, millions))225,894193,13017.0556,473355,13156.7
Adjusted EBITDA* (RUB, millions))246,262212,40315.9614,462399,24653.9
USD / boe
21.1220.403.519.5713.7742.1
Profit attributable to
Gazprom Neft PJSC
shareholders (RUB, millions))
132,19496,81036.5298,669189,00058.0
Operational cash flow181,347127,18042.6391,636325,78120.2
Free cash flow87,31235,949142.9134,84683,01362.4
Net debt / EBITDA0.791.01(21.8)0,791.27(37.7)

 

Key Operational Indicators

3Q
2018
2Q
2018
Δ, %9m
2018
9m
2017
Δ, %
Hydrocarbon production
including our share of joint
ventures (Mmboe)
177.90168.515.6510.96497.102.8
Hydrocarbon production
(including shares in joint
ventures (Mmtoe)
24.0122.725.768.9367.052.8
Refining throughput at own
refineries and joint ventures
joint venture refineries (Mt)
11.2410.447.731.8129.856.6
Sales through premium
channels
(million tonnes)
7.436.7410.220.2719.374.6
Sales at filling
stations(Mt)
2.932.814.18.418.143.3


* Adjusted EBITDA includes share of EBITDA from associated and jointly controlled companies recorded by equity accounting method
** With effect from 1 January 2018 the Group moved over to the new IFRS 15 definition of “Revenue from Contracts with Customers”, leading to changes in accounting policies and adjustments to certain sums recognised in the company’s financial accounts. Export duties are reflected in revenue totals, and the excise duty on sales levied in Serbia in the form of a sales tax is excluded.
*** For reference – “Sales (revenue) including excise duties” include excise duties on sales in international markets (Sales), applied until Q4 2017.


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