LUKOIL PROFIT: RUB 298.3 BLN
LUKOIL - PJSC LUKOIL today released its condensed interim consolidated financial statements as of and for the three and nine months ended 30 September 2017 prepared in accordance with International Financial Reporting Standards (IFRS).
For the first nine months of 2017 our sales increased by 11.7% year-on-year to 4,274.3 bln RUB. The growth was mainly driven by higher hydrocarbon prices as well as the increase in crude oil trading volumes, partially offset by stronger ruble and lower volumes of compensation crude oil from the West Qurna-2 project in Iraq.
In the third quarter of 2017 our sales were 1,483.5 bln RUB, up 9.1% quarter-onquarter primarily due to the higher hydrocarbon prices, as well as higher retail and wholesale sales volumes of own refined products in Russia and abroad, partially offset by lower trading volumes of refined products.
For the first nine months of 2017 EBITDA increased to 607.8 bln RUB, or by 11.0% year-on-year. In the third quarter of 2017, EBITDA increased by 23.5% quarter-onquarter to 221.1 bln RUB.
In both periods EBITDA dynamics was supported mainly by higher sales prices, growth of high-margin volumes in our overall production, higher gas production in Russia and Uzbekistan, improvement in the refined product slate at our own refineries, higher sales volumes via premium channels and the decrease in the transportation and SG&A expenses. EBITDA dynamics for the first nine months of 2017 was negatively impacted by lower volumes of compensation crude oil from the West Qurna-2 project in Iraq. Net of this project, EBITDA increased by 15.9% year-on-year.
Profit for the period
For the first nine months of 2017 profit attributable to PJSC LUKOIL shareholders was 298.3 bln RUB, up 86.2% year-on-year. In the third quarter of 2017 profit decreased by 29.8% quarter-on-quarter to 97.3 bln RUB.
Our profit was significantly affected by non-cash foreign exchange effect and a gain on sale of JSC Arkhangelskgeoldobycha in the second quarter of 2017. Excluding these items, profit attributable to PJSC LUKOIL shareholders in the third quarter increased by 32.8% quarter-on-quarter and for the first nine months of 2017 increased by 23.3% year-on-year.
For the first nine months of 2017 our capital expenditures amounted to 373.8 bln RUB, up 4.6% year-on-year driven by higher upstream investments due to the development of priority projects in Russia and Uzbekistan, partially offset by lower capital expenditures in the downstream as a result of the completion of a major upgrade program at our refineries. In the third quarter of 2017 our capital expenditures decreased to 118.9 bln RUB, or by 4.6% quarter-on-quarter mainly due to the seasonal decrease in West Siberia and Timan-Pechora as well as lower investments in Uzbekistan driven by the commissioning of the main production facilities at Gissar project in the third quarter of 2017.
Free cash flow
In the third quarter of 2017 our free cash flow was 90.7 bln RUB, of which 6.8 bln RUB were attributable to the working capital release. As a result, and despite the increase in the capital expenditures, free cash flow before changes in the working capital for the first nine months of 2017 increased by 16.6% year-on-year and amounted to 194.1 bln RUB.
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IMF - Output grew by 3.8 percent in 2017, underpinned by a resilient non-hydrocarbon sector, with robust implementation of GCC-funded projects as well as strong activity in the financial, hospitality, and education sectors. The banking system remains stable with large capital buffers. Growth is projected to decelerate over the medium term.
IMF - Higher oil prices and short-term portfolio inflows have provided relief from external and fiscal pressures but the recovery remains challenging. Inflation declined to its lowest level in more than two years. Real GDP expanded by 2 percent in the first quarter of 2018 compared to the first quarter of last year. However, activity in the non-oil non-agricultural sector remains weak as lower purchasing power weighs on consumer demand and as credit risk continues to limit bank lending.