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2018-08-08 11:45:00

ROSNEFT UP BY 2.8 TIMES

РОСНЕФТЬ БОЛЬШЕ В 2,8 РАЗА

ROSNEFTFinancial results for 2Q 2018 and 1H 2018

  • 2Q 2018 EBITDA growth by 46.8% up to RUB 565 bln with EBITDA margin improving to 26.9%
  • 2Q 2018 Net Income jumped by more than 2.8 times QoQ up to RUB 228 bln,
  • 1H 2018 Net Income is 1.4 times higher than 2017 level
  • Free Cash Flow improvement in 2Q 2018 by more than 1.5 times QoQ up to RUB 221 bln, 1H 2018 Free Cash Flow doubled YoY up to RUB 363 bln
  • Net Debt/EBITDA was down by 26% since the beginning of 2018 to 1.5x

Consolidated IFRS financial results for 2Q 2018 and 1H 2018:

 

2Q

2018

1Q

2018

Change,

%

1H

2018

1H

2017

Change,

%

Financial results

RUB bln (except %)

Revenues and equity share in profits of associates and joint ventures

2,065

1,722

19.9%

3,787

2,809

34.8%

EBITDA

565

385

46.8%

950

639

48.7%

EBITDA margin

26.9%

21.9%

5.0 p.p.

24.6%

22.0%

2.6 p.p..

Net income attributable to Rosneft shareholders   

228

81

>100%

309

751

>100%

Net income margin

11.0%

4.7%

6.3 p.p.

8.2%

2.7%

5.5 p.p.

Capital expenditures

229

223

2.7%

452

407

11.1%

Free cash flow (RUB equivalent)2

221

142

55.6%

363

178

>100%

Upstream operating expenses RUB/boe

192

185

3.8%

189

176

7.4%

 

 

USD bln3 (except   %)

Revenues and equity share in profits of associates and joint ventures

33.9

30.9

9.7%

64.8

50.1

29.3%

EBITDA

9.1

6.8

33.8%

15.9

11.0

44.5%

Net income attributable to Rosneft shareholders

3.6

1.5

>100%

5.1

1.3

>100%

Capital expenditures

3.7

3.9

(5.1)%

7.6

7.0

8.6%

Free cash flow

3.6

2.5

44.0%

6.1

2.9

>100%

Upstream operating expenses USD/boe

3.1

3.3

(6.1)%

3.2

3.0

6.7%

For reference

 

 

 

 

 

 

Average Urals price, USD per bbl

72.5

65.2

11.1%

68.9

50.5

36.3%

Average Urals price, th. RUB per bbl

4.48

3.71

20.7%

4.09

2.93

39.5%

 1 Net income in 1H 2017 is adjusted due to recognition of the final purchase price allocation of Bashneft assets in 2017.

2The calculation includes interest expense on the prepayments on the long-term oil and petroleum products supply agreements. Revised data for 1H 2017.

3Calculated using average monthly Central Bank of Russia exchange rates for the reporting period. 

 

Commenting the results for 2Q 2018, Rosneft Chairman of the Management Board and Chief Executive Officer Igor Sechin said:

"The second quarter was mainly a reflection of the management's efforts to improve the efficiency of the Company. On the back of significant improvement in macro conditions and robust cost control operating profit before depreciation, interest and taxes rose by more than 40% QoQ and by more than 80% YoY.

The key strategic acquisitions made in the period of low oil prices have been completed. The Company focuses on organic growth and monetization of synergies from the acquisitions.

In May 2018 the Company announced a set of initiatives to enhance shareholder value, including reduction of total debt and trading liabilities at least by RUB 500 bln this year and implementation of buy-back program.

We are actively working on the set initiatives to enhance shareholders returns. In the first half-year the Company more than halved its short-term financial liabilities. The Board of Directors approved detailed buy-back program. The management keeps maintaining the intensive work with the intention to meet the goals set for the year".

Financial performance

Revenues and equity share in profits of associates and joint ventures

2Q 2018 revenue amounted to RUB 2,065 bln (USD 33.9 bln) increasing by 19.9% QoQ, on the back of higher crude oil prices - 11.1% growth in USD terms and 20.7% increase in RUB terms.

In 1H 2018 revenue increased by 29.3% in USD terms YoY, mainly driven by market price improvement.

EBITDA

2Q 2018 EBITDA rose 1.5 times QoQ and reached RUB 565 bln (USD 9.1 bln). The significant QoQ EBITDA growth was achieved on the back of a significant increase in oil prices and a positive effect of export duty lag. The management's efforts, favorable price dynamics and increased equity share in profits of Russian and international projects (RUB 32 bln) contributed to 1H 2018 EBITDA growth up to RUB 950 bln.

Lifting costs were at 192 RUB/boe (or 3.1 USD/boe) in 2Q 2018 compared to 185 RUB/boe (or 3.3 USD/boe) in 1Q 2018. The cost dynamics is mainly explained by seasonality in upstream. 1H 2018 YoY increase in lifting costs (from 176 to 189 RUB/boe) was mainly driven by higher energy tariffs and increased repair and maintenance costs.

Net income attributable to Rosneft shareholders

2Q 2018 net income attributable to Rosneft shareholders jumped by 2.8 times QoQ and reached RUB 228 bln (USD 3.6 bln) on the back of operating income growth, FX impact and one-off gain from recognizing net income from the share acquisition in upstream JV with a foreign partner and recognition of fair value of previously held interest in JV.

In 1H 2018 net income attributable to Rosneft shareholders amounted to RUB 309 bln (USD 5.1 bln) exceeding 2017 level by 1.4 times, allowing for considerable growth in dividend base for interim 1H 2018 dividend payment.

Capital expenditures

Capital expenditures amounted to RUB 229 bln (USD 3.7 bln) in 2Q 2018 and RUB 452 bln (USD 7.6 bln) in 1H 2018. Its 9% growth (in USD terms) in 1H 2018 was driven by the development of Russian and international projects in accordance with the Company's business plan and strategy.

Free cash flow

1H 2018 free cash flow doubled YoY and reached RUB 363 bln (USD 6.1 bln) on the back of substantial EBITDA growth. In 2Q 2018 free cash flow amounted to RUB 221 bln (USD 3.6 bln).

Financial sustainability

Short-term financial liabilities dropped by 2.7 times (from USD 38.7 bln to USD 14.5 bln) due to scheduled repayments and partial refinancing with long-term instruments.

The Company's net debt level decreased by 12% in USD terms in 2Q 2018. Net debt/EBITDA was down by 26% since the beginning of 2018 to 1.5x as of the end of 2Q 2018.

-----

Earlier:

 ROSNEFT: OIL PRICE $75
2018, July, 25, 10:10:00

ROSNEFT: OIL PRICE $75

PLATTS - "Our own budget is based on a price of $63/b. Today we see that prices are around $75/b, I think that prices will be at around this level -- $75, or a maximum of $80/b," Sechin said when asked about his expectations for price levels by the end of 2018.

 

 ROSNEFT CAN ADD 100,000
2018, June, 6, 12:15:00

ROSNEFT CAN ADD 100,000

PLATTS - Russia's largest crude oil producer, Rosneft, is in a position to add 100,000 b/d to production in a few days if the conditions of the OPEC/non-OPEC production cut deal are eased, analysts at Aton said in a research note released following meetings with Rosneft officials.

 RUSSIA'S OIL RESILIENCE
2018, June, 6, 12:10:00

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FT - “In my opinion, the stability of Russian production was underestimated by the market,” said Igor Sechin, chief executive of Rosneft, the country’s top oil producer. “In general, the Russian oil sector investments in rouble equivalent under the crisis conditions were increasing, and so did the production.” 

 ЧИСТАЯ ПРИБЫЛЬ РОСНЕФТИ 81 МЛРД. РУБ.
2018, May, 16, 11:30:00

ROSNEFT NET INCOME RUB 81 BLN

ROSNEFT - Financial results for 1Q 2018 - Revenue growth by 22% to RUB 1.72 trln in 1Q 2018 - EBITDA increase by 15.6% up to RUB 385 bln in 1Q 2018 - Net income jumps by more than by 7 times to RUB 81 bln - Considerable improvement in free cash flow to RUB 142 bln - Short-term financial liabilities cut by 49%

 СДЕЛКА КАТАРА И РОСНЕФТИ
2018, May, 7, 08:20:00

ROSNEFT - QATAR DEAL

REUTERS - Qatar is taking a nearly 19 percent stake in Rosneft (ROSN.MM), rescuing the Russian oil major from its stalled deal to sell a major stake to China’s CEFC.

 BP - ROSNEFT STRONG PARTNERSHIP
2018, April, 25, 09:40:00

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REUTERS - BP (BP.L) has a “very strong” partnership with Russian oil giant Rosneft (ROSN.MM) but will steer away from politics, Chief Executive Officer Bob Dudley said on Tuesday, as Moscow could face new western sanctions.

 ENI - ROSNEFT COOPERATION
2018, April, 20, 09:15:00

ENI - ROSNEFT COOPERATION

REUTERS - Italian oil major Eni has no plans to pull out of its joint venture with Russia’s Rosneft despite escalating sanctions against Russia, the head of Eni said on Wednesday.

 

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