LUKOIL DOWN TO 29%
LUKOIL - PJSC LUKOIL released its audited consolidated financial statements for the full year of 2016 prepared in accordance with the International Financial Reporting Standards (IFRS).
In the fourth quarter of 2016 our sales increased to 1,400.9 bln RUB, or by 7.0% compared to the third quarter of 2016 mainly driven by higher crude oil prices. There was an increase in the share of crude oil sales in total sales due to the production growth as well as an increase in international trading volumes.
Our sales for 2016 decreased to 5,227.0 bln RUB, or by 9.1% compared to 2015 primarily due to lower crude oil prices as well as lower sales volumes of crude oil and petroleum products, which decreased by 3.7%. Growth of international trading volumes led to the significant increase in the share of crude oil in total sales. Changes in the product slate mix at our refineries resulted in the higher share of light product yield, which positively impacted the dynamics of our sales in 2016.
In the fourth quarter of 2016, our EBITDA increased to 183.3 bln RUB, or by 10.5% as compared to the third quarter of 2016 mainly due to the higher realized prices, growth of high-margin volumes in our overall production and crude oil export duty time lag effect, which were partially offset by the inventory build-up.
Our 2016 EBITDA was 730.7 bln RUB, down 10.5% year-on-year mainly because of lower volumes of compensation crude oil from West Qurna-2 due to the reimbursement of larger amount of historical costs in 2015. Net of this project our EBITDA increased by 1.7% and amounted to 691.3 bln RUB.
EBITDA was positively impacted by a growth of high-margin volumes in our overall production profile, higher refinery throughput, substantial improvement in the refined product slate and higher sales volumes via premium channels. These factors were partially offset by an increase in the mineral oil extraction tax base rate, higher transportation tariffs, a decline in refining margins and deterioration of retail margin in Russia due to the increase in excise taxes.
Profit for the year
In the fourth quarter of 2016, profit attributable to our shareholders was 46.6 bln RUB, down 15.0% quarter-on-quarter. For the full year 2016, profit decreased by 29.0% and amounted to 206.8 bln RUB.
A decrease in quarterly and annual figures was mainly due to non-cash foreign exchange effect as a result of volatility in the exchange rates. Net of this effect our profit increased by 8.9% quarter-on-quarter and by 46.4% year-on-year. Significant year-on-year increase resulted primarily from the substantial amount of impairment losses recognized in 2015.
Capital expenditures were 149.5 bln RUB in the fourth quarter of 2016, up by 23.9% quarter-on-quarter due to the seasonal increase of works in traditional regions as well as active development of gas projects in Uzbekistan.
For the full year of 2016, capital expenditures amounted to 511.5 bln RUB, down 15.8% year-on-year driven by the completion of a major upgrade program at our refineries and reduction of investments into our international projects.
Free cash flow
In the fourth quarter of 2016, our free cash flow was 54.6 bln RUB reaching 255.1 bln RUB for the full year, which is 2.7% higher compared to 2015 level. Free cash flow was positively impacted by reduction in capital expenditures and working capital release.
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IEA - For the third consecutive year, global energy investment declined, to USD 1.8 trillion (United States dollars) in 2017 – a fall of 2% in real terms. The power generation sector accounted for most of this decline, due to fewer additions of coal, hydro and nuclear power capacity, which more than offset increased investment in solar photovoltaics.
EIA - Crude oil production from the major US onshore regions is forecast to increase 143,000 b/d month-over-month in July from 7,327 to 7,470 thousand barrels/day , gas production to increase 1,066 million cubic feet/day from 69,466 to 70,532 million cubic feet/day .
U.S. FRB - Industrial production rose 0.6 percent in June after declining 0.5 percent in May. For the second quarter as a whole, industrial production advanced at an annual rate of 6.0 percent, its third consecutive quarterly increase. Manufacturing output moved up 0.8 percent in June.
U.S. DT - The sum total in May of all net foreign acquisitions of long-term securities, short-term U.S. securities, and banking flows was a net TIC inflow of $69.9 billion. Of this, net foreign private inflows were $58.8 billion, and net foreign official inflows were $11.1 billion.