Page 104 - RPTRusFeb17

partially finance the Trafigura and UCP part of the deal, Reuters wrote.
Rosneft’s profit fell by almost half last year, a s the world’s largest publicly traded oil producer by output struggled with low crude prices and increased costs. State-controlled Rosneft reported on February 23 net profit of RUB181bn ($3.14bn) for 2016, down 49% compared to 2015, following the slide in oil prices to a 12-year low. Profit in the fourth quarter of 2016 came to RUB52bn rubles, down 2% compared to the same period one year earlier, in spite of a surge in revenue fuelled by the acquisition of smaller Russian oil producer Bashneft, which Rosneft bought in October in a contentious deal involving allegations of bribery.
Russian energy giant Gazprom's capex programme, its size and sources of financing will be the main uncertainty i n the state-controlled company's development this year, analysts at Gazprombank predict. According to the bank, assuming that Gazprom attracts project financing (70%) for construction of the Amur gas processing plant, and Turkish Stream and Nord Stream-2 pipelines, cash capex would stand in the range of around $22bn-24bn (€20.7bn-€22.6bn) per year in the medium term. The forecast comes amid uncertainty about Gazprom's 2016 figures, still to be released. Earlier, Bloomberg predicted that Ebitda will decline by 28% to RUB1.4 trillion.
Russia’s largest oil company, Kremlin-controlled Rosneft, posted IFRS results for the fourth quarter of 2016, with revenues up by 9% quarter-on-quarter to $23.5bn. The company’s revenues in the reporting quarter were supported by both the output of Rosneft and the recently acquired Bashneft oil company, which was fully consolidated into Rosneft’s report. VTB Bank commented on February 23 that Rosneft’s revenues were in line with the bank’s forecast and 2% above the consensus market expectations.
The oil arm of Russia's Gazprom natural gas major Gazprom Neft reported net income of RUB53bn ($830mn) in the fourth quarter of 2016 , declining by 7.7% quarter-on-quarter. For 2016 overall net profit jumped by 83% y/y to RUB200bn. The company's gross revenues in the reporting quarter went up by 5.4% q/q to RUB474bn ($7.5bn), with Ebitda rising with the revenues by 4.3% q/q to RUB105bn ($1.7bn). Gazprombank commented on February 22 that Gazprom Neft's results were in line with the bank's and the consensus forecast, while noting seasonally higher operating costs pressuring the earnings.
Russia's second-largest gas producer Novatek posted IFRS net profit of RUB54bn ($0.93bn) in the fourth quarter of 2016, up from RUB14bn seen for the same quarter of 2015. The independent company's revenues in October-December rose by 9.3% year-on-year to RUB144bn ($2.49bn), which was attributed to strong growth in output (19% y/y gain) and better price environment. Novatek's Ebitda went up by 12% y/y to RUB63bn in the reporting quarter. For 2016 overall, Novatek's free cash flow (FCF) amounted to $2.17bn versus $1.47bn in 2015, according to the February 22 estimates of Gazprombank. At the same time, the company's leverage declined with net debt/Ebitda ratio down to 0.9x as of end of 2016 versus 2.1x in the previous year. Gazprombank notes that Novatek's strong bottom line in the fourth quarter implies a substantial increase in the interim dividends for the second half of 2016. The bank also sees a positive impact on Novatek's credit profile as it succeeded to cut its debt load considerably. "With net debt of 0.9x and an FCF/net debt coverage ratio of 86%, Novatek is becoming a company with one of the best profiles in the sector, while its bonds will likely trade inside the
104 RUSSIA Country Report February 2017 www.intellinews.com