Page 103 - RusRPTDec19

9.2 ​Major corporate news 9.2.1​ Oil & gas corporate news
● Gazprom
Gazprom Neft’s revenue in the nine months of 2019 grew by 2.4% year-on-year to RUB1.871 trillion​. Adjusted EBITDA amounted to RUB615.5bn, a 0.2-percent increase year-on-year. This positive dynamics reflects higher production at major projects and greater refining efficiency. Net profit attributable to Gazprom Neft PJSC shareholders totalled RUB320bn in 9M 2019, an increase of 7.1% year-on-year. Free cash flow amounted to RUB165.5bn, reflecting significant growth in operating cash flow in 9M 2019. Gazprom Neft continued to demonstrate consistently high level of financial viability, with the Company’s net debt/EBITDA ratio standing at 0.56 as at the end of Q3. Hydrocarbon production in 9M 2019, including Gazprom Neft’s share in joint ventures, grew by 4.4% year-on-year, to 71.9mn tonnes of oil equivalent (mtoe) – the result of higher production volumes at the Novoportovskoye and Vostochno-Messoyakhskoye fields, at the fields in the Orenburg region, and Gazprom Neft’s increased ownership interest in Arcticgas. The Company opened the first Integrated Field Development Centre (IFDC) in Russia, which will allow Gazprom Neft to halve lead-times in achieving “first oil” on its major production projects in the future.
Gazprom Neft​, the oil arm of Russian gas giant​ ​Gazprom​, posted 5% quarter-on-quarter increase in revenues in 3Q19 ​under IFRS despite the 10% q/q Brent oil price decline due to 11% q/q increase in crude and 9% q/q increase in refining output. Gazprom Neft’s earnings matched expectations by remaining flat q/q at $2.6bn, with the positive sales trends being undercut by lower price and higher export duty q/q given higher output at non-tax exempt fields, BCS Global Markets commented on November 19. The company’s bottom line in the reporting quarter slipped 2% q/q to about $1.6bn, supported by $33mn foreign currency gain, while free cash flow remained positive at $550mn (albeit shrinking 2-fold q/q) on $595mn dividends received from Arcticgas.
● Rosneft
Russia's ​Rosneft​ oil major delivered strong results in 3Q19, with revenue growth of 1% quarter-on-quarter to $34bn and Ebitda growth of 6% q/q to $8.6bn ​beating the consensus expectations by 1% and 5% respectively. In the reporting quarter the resolution of Druzhba contaminated oil related issues with Transneft pipeline operator helped to offset 10% q/q lower Brent price on average. On the earnings level, the 10% drop q/q in RUB-based oil price was mitigated by higher reverse excise received by refineries and higher products sales, which translated into better downstream results, BCS Global Markets commented on November 6. Rosneft’s bottom line in 3Q19 beat exceeded the expectations by 13%, gaining 16% q/q to $3.5bn on strong Ebitda performance, $170mn currency gain, and a drop in non-operating expenses of 90% q/q. In 9M19 overall Rosneft increased net profit by 25% to RUB550bn with the capital expenditures down by 6.6% year-on-year to RUB634bn in the period, attributed mostly to extraction costs optimization. Russia’s largest crude producer generated free cash flow of $4.3bn with a cash flow yield that exceeded 20% in the reporting quarter. “Since 2H18 dividends were paid in
103​ RUSSIA Country Report​ December 2019 ​ ​www.intellinews.com