Bashneft Group, which comprises PJSOC Bashneft and its subsidiaries, has released its unaudited consolidated financial statements for the first quarter of 2016 prepared in accordance with International Financial Reporting Standards (IFRS).
1Q 2016 vs. 1Q 2015:
- The Group’s revenue from sales decreased by 8.2% to 131,259 million roubles.
- EBITDA grew by 7.7% to 28,545 million roubles.
- Adjusted EBITDA increased by 5.3% to 28,165 million roubles.
- Net income attributable to the shareholders of the parent company increased by 26.7% to 14,434 million roubles.
- Capital expenditure grew by 41.7% to 17,227 million roubles.
- Operating cash flow reached 59,422 million roubles as against minus 2,697 million roubles in the first quarter of 2015.
- Net debt dropped by 50.0% to 72,673 million roubles.
- Adjusted net debt decreased by 26.7% to 107,463 million roubles.
1Q 2016 vs. 4Q 2015:
- The Group’s revenue from sales decreased by 11.3%.
- EBITDA gained 4.9%.
- Adjusted EBITDA decreased by 6.8%.
- Net income attributable to the shareholders of the parent company soared by 109.3%.
- Operating cash flow jumped by 169.3%.
- Capital expenditure declined by 8.5%.
- Net debt decreased by 29.5%.
- Adjusted net debt dropped by 3.7%.
Despite deterioration in market conditions, in the first quarter of 2016, the Company achieved strong financial results. The fall in oil prices that continued during the period in question was partially offset by a 12.3% increase in oil production (to 5,286 thousand tonnes) and growth of oil sales, including a 21.8% increase in export sales (to 2,033 thousand tonnes) and a 72.3% rise in domestic sales (to 684 thousand tonnes) compared to the first quarter of 2015. As a result, revenue from crude oil sales decreased by a mere 7.3% compared to the first quarter of 2015 and by 5.8% compared to the fourth quarter of 2015.
In the first quarter of 2016, the Company maintained an economically viable level of oil refining (4,732 thousand tonnes) and continued to work towards qualitative improvement of its product mix. Thus, Bashneft increased gasoline output by 6.8% (to 1,293 thousand tonnes) and decreased fuel oil output by 10.8% (to 630 thousand tonnes) compared to the first quarter of 2015; in addition, it completely ceased to produce vacuum gas oil. Furthermore, in the first quarter of 2016, 100% of motor gasoline and diesel fuel produced by Bashneft met the Euro 5 standard.
By maximizing the value of its product mix and boosting domestic sales of petroleum products and petrochemicals by 10.5% (to 2,473 thousand tonnes) in the first quarter of 2016, Bashneft achieved an 8.7% year-on-year increase in revenue (to 52,441 million roubles). This partially offset a 24.4% year-on-year decrease in revenue from export sales of petroleum products (to 40,053 million roubles) in the first quarter of 2016. As a result, in the first quarter of 2016, total revenue from sales of petroleum products and petrochemicals declined by 8.6% (to 92,494 million roubles) compared to the first quarter of 2015.
Despite the decrease in revenue, in the first quarter of 2016, adjusted EBITDA grew by 5.3% year on year to 28,165 million roubles. This growth was driven by an 8.6% reduction in operating expenses (to 112,921 million roubles) compared to the first quarter of 2015.Key factors behind the reduction in operating expenses included a 34.4% decrease in mineral extraction tax payments (to 15,818 million roubles), a 41.6% fall in export tariffs (to 12,068 million roubles) and a 14.3% decrease in the cost of purchased raw materials (to 26,589 million roubles).
In the first quarter of 2016, net income attributable to the shareholders of the parent company increased by 26.7% compared to the first quarter of 2015 and soared by 109.3% compared to the fourth quarter of 2015, reaching 14,434 million roubles. The increase in net income was related to recovery of financial assets impaired in 2014, which were paid out to the Group by a debtor in full in the first quarter of 2016 and totalled 5,590 million roubles.
In the first quarter of 2016, the Company’s operating cash flow jumped by 169.3% quarter on quarter (to 59,422 million roubles), as in January 2016 the Company received prepayment totalling US$ 500 million (39,243 million roubles) under a long-term contract for the supply of crude oil and petroleum products.
In the first quarter of 2016, capital expenditure grew by 41.7% year on year (to 17,227 million roubles), which was related mainly to an increase in investment in the development of the R. Trebs and A. Titov fields. Capital expenditure declined by 8.5% compared to the fourth quarter of 2015.
As of March 31, 2016, the Group’s total debt amounted to 121,754 million roubles, which is 23.2% lower than the level as of March 31, 2015 (158,583 million roubles) and 10.5% lower than the level as of December 31, 2015 (136,007 million roubles). As of March 31, 2016, net debt amounted to 72,673 million roubles, down by 50.0% compared to March 31, 2015 (145,328 million roubles) and down by 29.5% compared to December 31, 2015 (103,052 million roubles). As of March 31, 2016, adjusted net debt totalled 107,463 million roubles, down by 26.7% compared to March 31, 2015 (146,516 million roubles) and down by 3.7% compared to December 31, 2015 (111,544 million roubles).
KEY FINANCIAL AND OPERATING RESULTS FOR THE FIRST QUARTER OF 2016
|Oil production (thousand tonnes)||5,286||5,245||0.8%||5,286||4,709||12.3%|
|Oil refining (thousand tonnes)||4,732||4,821||-1.8%||4,732||4,715||0.4%|
|Sales revenue (million roubles)||131,259||147,970||-11.3%||131,259||142,930||-8.2%|
|EBITDA (million roubles)||28,545||27,207||4.9%||28,545||26,501||7.7%|
|Adjusted EBITDA (million roubles)||28,165||30,228||-6.8%||28,165||26,737||5.3%|
|Operating income (million roubles)||18,337||15,565||17.8%||18,337||19,408||-5.5%|
|Net income (loss) attributable to the shareholders of the parent company (million roubles)||14,434||6,897||109.3%||14,434||11,390||26.7%|
|Operating cash flow (million roubles)||59,422||22,065||169.3%||59,422||(2,697)||n/a|
|CAPEX (million roubles)||17,227||18,833||-8.5%||17,227||12,161||41.7%|
|Net debt (million roubles)||72,673||103,052||-29.5%||72,673||145,328||-50.0%|
|Adjusted net debt (million roubles)*||107,463||111,544||-3.7%||107,463||146,516||-26.7%|
*-calculated as net debt increased by the amount of the long-term portion of prepayment under crude oil and petroleum product supply contracts and reduced by the amount of short-term financial investments
DocumentationBashneft Group IFRS financial results for 1Q 2016 (MD&A) Full text (PDF, 476.61 КБ ) Bashneft Group IFRS financial results for 1Q 2016 (Presentation) Full text (PDF, 442.71 КБ) Bashneft Group Consolidated Financial Statements for 1Q 2016 Full text (PDF, 568.62 КБ)