Gazprom Neft reports IFRS financial results for 2H and 1H 2016
Gazprom Neft PJSC has published its consolidated financial results, in accordance with International Financial Reporting Standards (IFRS) for 2Q and 1H 2016.
The current macroeconomic environment notwithstanding, increasing production and the adoption of various management decisions directed at optimising refining volumes as well as the range and nature of the company’s product mix resulted in a 1.9% Y-o-Y increase in adjusted EBITDA (earnings before interest, taxation, depreciation and amortization), reaching 204 RUB billion.* After one-time adjustments (arising from provision charges for impairment, as well as advances against fixed (non-current) assets), net profit attributable to shareholders in Gazprom Neft PJSC in the first six months of 2016 reached 104 RUB billion, a 7.1% Y-o-Y increase.** Net profit attributable to shareholders in Gazprom Neft in 1H 2016 totaled 90.4 RUB billion.
Adjusted EBITDA for 2Q 2016 increased by 11.2% against 1Q 2016, reaching 107 RUB billion – the result of an upward crude price trend, in addition to higher prices for oil products in 2Q 2016. Net profit attributable to shareholders in Gazprom Neft PJSC totaled 48.9 RUB billion in 2Q 2016, an increase of more than 17.6% Q-o-Q. The rise in net profit is the result of the positive impact of higher adjusted EBITDA, as well as foreign currency gains on the revaluation of the company’s loan portfolio.
1H 2016 results show a 10% Y-o-Y increase in hydrocarbon production, reaching 41.82 million tonnes of oil equivalent (mmtoe). This increase in production is the result of continuing production growth at SeverEnergia (Arcticgas) fields, sustained production volumes at Northgas, rising production at the Prirazlomnoye and Novoportovskoye fields, and increasing gas utilizationat fields throughout the Khanty-Mansiysk and Orenburg regions, as well as the maintenance of production volumes at mature fields. Total production of hydrocarbons including the company’s share in joint ventures reached 20.88 mtoe in 2Q 2016.
A total of 20.65 million tonnes of crude was processed at Gazprom Neft refineries and JV refining assets in 1H 2016 (a decrease of 3.1%). Refining volumes were maintained at an optimum level given the prevailing level of demand and the competitive pricing environment for oil and oil products. Production volumes of light oil products, moreover, were steady Y-o-Y.
Refining volumes at Gazprom Neft refineries increased by 1.9% in 2Q 2016, reaching 10.42 million tonnes. This growth was due to higher utilization rates at the Moscow refinery and NIS, in response to rising demand and a stronger price environment for crude and oil products.
Sales of oil products through premium retail channels reached 6.16 tonnes in 2Q 2016, a 9% rise Q-o-Q. Sales through the Gazprom Neft retail network throughout Russia and the CIS, as well as through the company’s retail network in the Balkans, increased by 9.8% Q-o-Q, reaching 2.58 million tonnes.
