Q1 2012 sales revenue was RUB 748 billion, matching the level in Q4 2011. This represents a 27% increase on Q1 2011. Revenue was up thanks to higher oil and petroleum product prices and increased oil production and refining volumes.
Financial and Operating Highlights:
- Net profit grew 55.6% on Q4 2011;
- EBITDA increased 11.5% on Q4 2011;
- Hydrocarbon output up 2.7% on Q1 2011;
- Refinery throughput increased 25% compared to Q1 2011.
Rosneft’s EBITDA in Q1 2012 amounted to RUB 165 billion. This represents an 11.5% increase on Q4 2011 and a 14.9% drop on Q1 2011. Prudent cost management had a positive impact on EBITDA. Crude production costs fell 6.3% on Q4 2011 to RUB 88.3 per barrel. General and administrative expenses per barrel fell 2.6%.
The increase in the base mineral extraction tax (MET) rate negatively impacted EBITDA, as did increased transport tariffs and electricity prices. EBITDA was also affected by higher excise duties, which were not compensated by a corresponding rise in petroleum product prices on the domestic market. A key factor behind the decrease in EBITDA compared to Q1 2011 was the expiration of reduced MET rates and export duties for oil produced at the Vankor field.
Q1 2012 net profit was RUB 112 billion, which represents a 55.6% increase on Q4 2011 and an 8.9% drop on Q1 2011. Other expenses decreased from Q4 2011, while exchange rate gains rose compared to Q1 2011, which was reflected in a better net profit dynamic compared to that of EBITDA.
As a measure to manage cash flow, Rosneft temporarily stopped collecting advance payments from oil purchasers in Q1 2012, which led to an increase in working capital. Additional factors contributing to a further increase in Rosneft’s working capital were the expansion of the Company’s own oil stocks at refineries in Germany and the creation of petroleum product reserves in Russia in anticipation of a seasonal increase in demand. Cash flow from operations before the changes in working capital was RUB 141 billion, a 9% increase on Q4 2011. Rosneft’s free cash flow before the changes in working capital was RUB 23 billion.
Hydrocarbon production (including production by subsidiaries and share in production by affiliated companies) increased 2.7% in Q1 2012 compared to the same period last year to 2,634 th. boepd. Oil production increased 2.3%, while gas output grew 9.4%.
The Company refined 15.54 million tonnes of crude at refineries in Russia and those of Ruhr Oel GmbH in Germany which represents a 2.3% drop on Q4 2011 and a 25.0% increase compared to Q1 2011. Refinery throughput increased on Q1 2011 thanks to the acquisition of a 50% share of Ruhr Oel GmbH in May 2011. The negligible decrease in refinery throughput in Russia compared to Q4 2011 was due to planned maintenance works at the Komsomolsk and Novokuibyshevsk refineries.
Commenting on Q1 2012 results, Rosneft President Eduard Khudainatov said: “Our Q1 results are much better than planned. We exercised prudent cost management and achieved outstanding efficiency given the macroeconomic environment. Our key objectives for this year are to press ahead with our large-scale production and refining projects and optimise our business across the board.”