Rosneft: Financial Results for Q1 2021
Consolidated financial results under IFRS for the I quarter. 2021:
| I quarter. 2021 | IV quarter. 20 20 | % of | I quarter. 2021 | I quarter. 2020 | % of | |
|---|---|---|---|---|---|---|
| RUB bln (with the exception of %) | ||||||
| Sales and income from associates and joint ventures | 1737 | 1521 | 14.2% | 1737 | 1758 1 | (1.2)% |
| EBITDA | 445 | 364 | 22.3% | 445 | 309 | 44.0% |
| EBITDA margin | 25.0% | 23.2% | 1.8 pp | 25.0% | 17.3% | 7.7 pp. |
| Net income attributable to Rosneft shareholders | 149 | 324 | (54.0)% | 149 | (156) | – |
| Net profit margin | 8.6% | 21.3% | (12.7) pp. | 8.6% | (8.9)% | 17.5 pp |
| Capital expenditures | 225 | 216 | 4.2% | 225 | 185 | 21.6% |
| Free cash flow (RUB equivalent) 2 | 190 | 73 | > 100% | 190 | 219 | (13.2)% |
| Operating costs, RUB / boe | 194 | 197 | (1.5)% | 194 | 191 | 1.6% |
| bln USD 3 (excluding%) | ||||||
| Sales and income from associates and joint ventures | 23.9 | 20.6 | 16.0% | 23.9 | 27.6 | (13.4)% |
| EBITDA | 6.0 | 4.8 | 25.0% | 6.0 | 4.9 | 22.4% |
| Net income attributable to Rosneft shareholders | 2.0 | 4.3 | (53.5)% | 2.0 | (2.0) | – |
| Capital expenditures | 3.0 | 2.8 | 7.1% | 3.0 | 2.8 | 7.1% |
| Free cash flow | 2.5 | 0.8 | > 100% | 2.5 | 3.5 | (28.6)% |
| Operating costs, USD / boe | 2.6 | 2.6 | – | 2.6 | 2.9 | (10.3)% |
| For reference | ||||||
| Average Urals price, USD / bbl | 59.3 | 44.5 | 33.2% | 59.3 | 48.1 | 23.3% |
| Average price of Urals, thousand rubles / bbl | 4.41 | 3.39 | 29.9% | 4.41 | 3.19 | 38.2% |
1 The indicator has been adjusted for changes in data in the comparable period.
2 The calculation includes interest for the use of cash received under long-term contracts for the supply of oil and petroleum products.
3 Average monthly rates of the Central Bank of the Russian Federation were used for conversion.
- NET PROFIT BY RESULTS OF THE I SQ. HAS REACHED RUB 149 BLN.
- EBITDA INCREASED BY 44% COMPARED TO Q1 2020 AND AMOUNTED BY 445 BLN RUB.
- REVENUE INCREASED ALMOST 15% COMPARED TO Q4 2020 G.
- SPECIFIC OPERATING COSTS FOR PRODUCTION OF HYDROCARBONS REDUCED TO THE MINIMUM LEVEL – 2.6 USD / BNE. (194 RUB / B.N.E.)
- FREE CASH FLOW INCREASED 2.6 TIMES TO LEVEL IV QUARTERLY. 2020 – UP TO 190 BLN RUB.
- FINANCIAL DEBT DECREASED BY $ 2.9 BLN
Commenting on the Company’s financial results for the 1st quarter. 2021, Chairman of the Management Board and Chief Executive Officer of PJSC NK Rosneft I.I. Sechin said:
“ In the reporting period, we managed to ensure stability and continuity of work. All employees of NK Rosneft and the Group Companies were provided with the necessary medical support, and employees of subsidiaries and the central office are vaccinated to protect against coronavirus infection. Preservation of life and health, as well as labor safety of employees are one of the key priorities for the Company.
Despite all the difficulties caused by the COVID-19 pandemic, Rosneft in Q1. demonstrated strong financial results: the company received a net profit of RUB 149 billion, EBITDA reached its highest value since the beginning of the pandemic, financial debt decreased by $ 2.9 billion, and free cash flow approached the quarterly average of the pre-crisis 2019.
These high results became possible due to the systematic work of all divisions of the Company, aimed at improving the efficiency of activities. As the leader in hydrocarbon production in Russia, Rosneft makes the largest contribution to fulfilling our country’s obligations to balance supply and demand in the global oil market and stabilize prices for raw materials.
Rosneft continued to work on the implementation of strategically important projects, including the Vostok Oil project, which guarantees the Company stable production and profit levels in the long term and provides a significant competitive advantage. Rosneft is also demonstrating decisiveness in the area of energy transition, consistently increasing the share of gas in hydrocarbon production.
In accordance with the dividend policy, the Rosneft Board of Directors in April recommended paying dividends for 2020 in the amount of RUB 73.55 billion. As the macroeconomic environment recovers, production volumes and profits grow, we will strive to improve the returns to our shareholders.
Financial performance
Sales and income from associates and joint ventures
In the 1st quarter. 2021 sales revenue and income from associates and joint ventures amounted to RUB 1,737 billion. ($ 23.9 billion). The increase in revenues qoq was mainly due to the rise in oil prices.
Revenue decreased by 1.2% year-on-year due to a decrease in oil sales (-32.9% to the level of Q1 2020) and oil products (-14.5% to the level of Q1 2020) due to a decrease in demand in the global market due to the COVID-19 pandemic and a decrease in production volumes under the OPEC + Agreement, in force since May 2020.The decrease in sales volumes was offset by an increase in oil prices in 2021 (+ 23.3% to level of the 1st quarter of 2020)
EBITDA
In the 1st quarter. 2021 EBITDA amounted to 445 billion rubles. ($ 6 billion). Increase in EBITDA (+ 22.3%) versus Q4 2020 is associated with an increase in oil prices, a positive effect of “reverse excise”, which were partially offset by an increase in taxes: income tax and mineral extraction tax.
The positive dynamics of EBITDA was also supported by a decrease in operating, general and administrative expenses. According to the results of the 1st quarter. By 2021, unit operating costs for production decreased (-1.5%) in relation to the IV quarter. 2020, and amounted to 194 rubles / boe. ($ 2.6 / boe). In dollar terms, the indicator remained at the level of the IV quarter. 2020 g.
Increase in EBITDA in relation to the level of the 1st quarter. 2020 is mainly associated with higher prices and the positive effect of “reverse excise”.
Net profit of shareholders of the Company
In the 1st quarter. 2021 net profit amounted to RUB 149 billion. ($ 2.0 billion) Decrease in comparison with IV quarter. 2020 is due to the effect of the recognition of a one-time income from an asset acquisition transaction in Q4. 2020 g.
A significant increase in net profit relative to the 1st quarter. 2020 is associated with an increase in operating profit, a decrease in finance costs, as well as a decrease in the negative effect of non-monetary factors.
Capital expenditures
For the I quarter. In 2021, capital expenditures for the Company as a whole amounted to RUB 225 billion, which is at the level of Q4. 2020 and more by 22% in relation to the 1st quarter. 2020 Growth is mainly associated with the start of the Vostok Oil integrated project.
Free cash flow
Free cash flow in Q1 2021 amounted to 190 billion rubles. ($ 2.5 billion). Free cash flow growth in relation to the IV quarter. 2020 is associated with an increase in operating income.
Financial stability
In the 1st quarter. In 2021, the amount of financial debt and trade liabilities was reduced by $ 4.6 billion, incl. the amount of financial debt – by 2.9 billion US dollars in relation to the IV quarter. 2020 The value of the net debt / EBITDA ratio in dollar terms was 2.2x. A high level of financial stability is supported by a decrease in the short-term part of the financial debt. At the end of the reporting period, the volume of liquid financial assets exceeded the short-term part of financial debt by 2.3 times.
