Gazprom Neft increases net profit by 29% in H1 2019

08 August 2019
  • Net profit for H1 2019 of RUB215.0 billion – a 29.2% increase year-on-year
  • Adjusted EBITDA1 up 10.8% year-on-year, reaching RUB408.1 billion
  • Net debt to EBITDA ratio as at end H1 standing at 0.54x

Gazprom Neft today announces its consolidated IFRS financial results for the first six months (H1) and second quarter (Q2) of 2019.

Gazprom Neft’s revenue in the first six months of 2019 totalled RUB1.215 trillion, an increase of 6.8% year-on-year, with higher production growth at major projects (the Novoportovskoye and Vostochno-Messoyakhskoye fields), a more favourable pricing environment, and effective management initiatives delivering adjusted EBITDA growth of 10.8% year-on-year, at RUB408.1 billion. Net profit attributable to Gazprom Neft PJSC shareholders totalled RUB215 billion, a 29.2% increase year-on-year. Higher operating cash flow resulted in a positive free cash flow of RUB125.2 billion in H1 2019.

Hydrocarbon production, including Gazprom Neft’s share in joint ventures, rose to 47.4 million tonnes of oil equivalent (mtoe) in H1 2019, a 5.6% increase year-on-year, as a result of higher production levels at the Novoportovskoye and Vostochno-Messoyakhskoye fields, as well as in the Orenburg region, together with a greater ownership interest in Arсtiсgas.

Refining volumes at Gazprom Neft’s own and joint-venture refining assets amounted to approximately 20 million tonnes in H1 2019: these volumes being impacted by planned repairs at the Company’s Pančevo and Yaroslavl refineries.

As part of its development of its petrochemicals business, as envisaged under the Company’s long-term development strategy, Gazprom Neft, together with SIBUR, consolidated 100 percent of the charter capital in the Poliom LLC polypropylene plant in Omsk: the integration of refining and petrochemicals assets allowing the Company to improve efficiency by using refinery feedstocks to produce high-value-added products. The Company also increased sales of oil products through premium channels in H1 2019, with sales of bitumen materials, in particular, increasing by more than 15%, sales of lubricants by 6.7%, and sales of bunkering fuels by more than 22%.

Financial Highlights

Q2
2019
Q1 2019

Δ, %

6M 20196M 2018Δ, %
Sales (RUB billions)628,315586,3597.21,214,6741,137,7366.8
EBITDA (RUB billions)189,939179,0526.1368,991330,57911.6
Adjusted EBITDA* (RUB billions)210,367197,6886.4408,055368,20010.8
$/boe
18.1517.424.217.7818.63(4.6)

Profit attributable to Gazprom Neft
shareholders (RUB billions)

107,145107,894(0.7)215,039166,47529.2
Operating cash flow134,509168,596(20.2)303,10583,10944.1
Free cash flow34,18491,000(62.4)125,18447,534163.4
Net debt / EBITDA0.540.59(8.5)0.541.01(46.5)

Operating highlights

Q2 2019Q1 2019

Δ, %

6M 20196M 2018Δ, %
Hydrocarbon production
including our share of
joint ventures (mboe)
179.60171.674.6351.27333.065.5
Hydrocarbon production
including our share
of joint ventures (mtoe)
24.1923.244.147.4344.925.6
Refining throughput at own
refineries and joint ventures
(million tonnes)
10.039.960.719.9920.57(2.8)

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