Russian state-owned oil giant Rosneft posted a rise in first-quarter
net income on May 5 of 8.3% year on year to 13 billion rubles ($221.4
million).
"The Company maintained industry leadership in investments pursuing
monetisation of unique reserves base and planned completion of large
investment projects in near-term,” Rosneft CEO
Igor Sechin said in a press release, commenting the results the first quarter of 2107.
Sechin noted that the environment remains difficult. Continuing world
commodity markets volatility, rouble appreciation – all of this
impacted Rosneft’s financial results, he said.
At the same time, Rosneft’s management takes all efforts to further
improve efficiency and realise synergy effect from Bashneft integration,
Sechin said. Undertaken measures let the Company maintain the operating
profit in dollar terms at the level of the fourth quarter of 2016 and
increase it by more than 1.5 times year-on-year, Sechin said.
Rosneft continues effective communication with the Russian government
regarding investment drivers and schemes for realisation of Rosneft’s
reserves base potential, and issues of sustainable financial model
implementation for refining business, Sechin said.
Taking into consideration new strategic acquisitions which synergy
effect will be realized in near future, Rosneft continues maintaining
conservative level of financial leverage (net debt/EBITDA 1.56x) and
stable cash flow generation, the CEO said.
In the first quarter of 2017 revenues amounted to 1,410 billion
roubles ($24.8 billion). Moderate decrease in revenues in rouble terms
compared to the fourth quarter 2016 was due to significant rouble
appreciation and decline of crude oil export volumes in current external
limitations. Revenues in dollar term increased by 2.9% quarter to
quarter and in more than 1.5 times year-on-year.
In the first quarter of 2107 a positive effect of export duty lag
decreased by 17 billion roubles verses the fourth quarter of 2016,
Rosneft said.
However, average oil price growth by 8.2%, 6.7% decrease in upstream
operating expenses to 168 roubles per barrel of oil equivelent on the
background of planned optimisation of expenses on equipment repair and
maintenance, administrative expenses control and realisation of
synergies from acquisition of new assets contributed to maintaining
EBITDA in dollar terms ($ 5.7 billion) approximately at the level of the
fourth quarter of 2016. However, EBITDA in rouble terms in the first
quarter of 2017 decreased to 333 billion roubles due to significant
negative impact of rouble appreciation.
On the background of rouble strengthening (7.2%) and increased MET
rate (17.5%) EBITDA margin decline was only 1.2 p.p. quarter to quarter
to 22.8%.
Improved macro conditions, increase in production, management efforts
to control expenses and starting realisation of synergy effect from the
acquisition of new assets encouraged EBITDA growth by 22.0%
year-on-year.
Net income attributable to Rosneft shareholders amounted to 13
billion roubles in the first quarter of 2017 (+8.3% vs adjusted net
income in the first quarter of 2016) in view of significant negative
effect of foreign exchange rates due to rouble appreciation.
Taking into account the seasonality, capital expenditures decreased
to 192 billion roubles ($3.3 billion) in the first quarter of 2017.
Compared to the first quarter of 2016 capital expenditures increased by
24.7% in rouble terms (57.1% in dollar terms) in accordance with the
plan, Rosneft said.
In the first quarter of 2017 free cash flow exceeded 89 billion
rubles ($1.4 billion) during significant decrease in impact of working
capital changes resulted from crude oil and petroleum prices relative
stabilisation.
As of the end of the first quarter 2017 net debt/EBITDA ratio was at
1.56 in dollar terms. Stable cash flow secured the fulfillment of
planned payments on financial debt in the first quarter of 2017 and
Rosneft’s obligations amounted to 50 billion roubles on the mandatory
offer for the acquisition of Bashneft ordinary shares from minority
shareholders. Rosneft continues conservative liquidity management taking
into consideration active stage of development of significant
investment projects.
https://www.neweurope.eu/article/rosneft-posts-q1-net-income-rise-8-3/