Gazprom Neft demonstrates solid performance in Q1 2019

21 May 2019

 

 

  • Net profit for Q1 2019 of RUB107.9 billion, a 1.5-fold (54.9 percent) increase year-on-year
  • Adjusted EBITDA* up 26.9 percent year-on-year, reaching RUB197.7 billion
  • Net debt to EBITDA ratio as at end Q1 2019 standing at 0.59x

Gazprom Neft’s revenue in the first three months of 2019 totalled RUB586.4 billion, a 12.6 percent increase year-on-year, driven by a combination of higher oil sales and a favourable price environment. Growth in adjusted EBITDA, at 26.9 percent year-on-year and reaching RUB197.7 billion, was achieved as a result of higher production volumes at major projects and effective management initiatives. Net profit attributable to Gazprom Neft PJSC shareholders totalled RUB107.9 billion, a 54.9-percent increase year-on-year.

Higher operating profit and the positive impact of changes to working capital resulted in a two-fold increase in operating cash flow, reaching RUB168.6 billion. This, in turn, led to a significant increase in free cash flow (FCF), to RUB91 billion.

The Company has been demonstrating a consistently high credit-worthiness, the result of consistent reductions to its net debt to EBITDA ratio (0.59x as at end Q1 2019).

Hydrocarbon production, including Gazprom Neft’s share in joint ventures, rose to 23.3 million tonnes of oil equivalent (mtoe) in Q1 2019, a 4.7 percent increase year-on-year, as a result of higher production levels at new fields (including the Novoportovskoye and Vostochno-Messoyakhskoye fields, and in the Orenburg region) together with a greater ownership interest in Arktikgas.

Refining volumes at Gazprom Neft’s own and joint-venture refining assets amounted to approximately 10 million tonnes in Q1 2019, effectively flat year-on-year. Sales of oil products via premium channels reached approximately six million tonnes. Gazprom Neft increased its market share in environmentally friendly marine fuels and increased sales of bunkering fuels by 24.6 percent, to 800,000 tonnes. Total sales of Gazprom Neft aviation fuels rose by 4.5 percent year-on-year, reaching 700,000 tonnes.

Financial Highlights

Q1 2019Q4
2018

Δ, %

3M 20193M 2018Δ, %
Sales (RUB billions)586,359661,999(11.4)586,359520,63312.6
EBITDA (RUB billions)179,052166,4247.6179,052137,44930.3
Adjusted EBITDA* (RUB billions)197,688185,0446.8197,688155,79726.9
$/boe
17.4215.6811.117.4216.654.6

Profit attributable to Gazprom Neft
shareholders (RUB billions)

107,89477,99838.3107,89469,66554.9
Operating cash flow168,596145,88715.6168,59683,109102.9
Net debt / EBITDA0.591.19(50.6)0.591.17(49.7)

Operating highlights

Q1 2019Q4 2018

Δ, %

3M 20193M 2018Δ, %
Hydrocarbon production
including our share of
joint ventures (mboe)
171.67177.46(3.3)171.67164.554.3
Hydrocarbon production
including our share
of joint ventures (mtoe)
23.2423.95(3.0)23.2422.204.7
Refining throughput at own
refineries and joint ventures
(million tonnes)
9.9611.10(10.3)9.9610.13(1.7)
Sales through premium
channels (million tonnes)
5.966.83(12.7)5.966.10(2.3)

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