Gazprom Neft 1H 2018 net profit up 1.5-fold
For the first six months of 2018 Gazprom Neft achieved revenue** growth of 24.4% year-on-year, at one trillion, 137.7 billion rubles (RUB1,137,700,000,000). The Company achieved a 49.8% year-on-year increase in adjusted EBITDA, to RUB368.2 billion. This performance reflected positive market conditions for oil and oil products, production growth at the Company's new projects, and effective management initiatives. Net profit attributable to Gazprom Neft PJSC shareholders grew 49.6% year on year, to RUB166.4 billion. Growth in the Company's operating cash flow, as well as the completion of key infrastructure investments at new upstream projects, delivered positive free cash flow of RUB47.5 billion for 1H 2018.
Total hydrocarbon production (including Gazprom Neft's share in production at joint enterprises) in the first six months of 2018 amounted to 44.9 million tonnes of oil equivalent (mtoe), an increase of 2% year-on-year. This was driven by higher production at new fields (Novoportovskoye and Vostochno-Messoyakhskoye) and an increase in Gazprom Neft's interest in Arktikgaz, from 46.6% to 50% in March 2018.
First-half refining volumes increased by 9,8%, having been restored following the completion of a planned refinery maintenance in 1H 2017. Light petroleum product output also outperformed as a result of improved refining efficiency. The Company also increased its sales of oil products through premium sales channels, by 6.4% year-on-year, to 12.8 million tonnes.
Alexander Dyukov, Chairman of the Gazprom Neft Management Board, commented: “Gazprom Neft has seen a 1.5-fold increase in its operating profit in the first half of 2018, once again confirming its market-leading position in terms of financial growth. In an environment of curtailed oil production, the company has focused on increasing operating efficiency: industry trends and inflationary factors notwithstanding, Gazprom Neft reduced the unit costs of crude production at mature fields by eight percent year-on-year, as well as ensuring optimum refining volumes in current marketing conditions, and increasing sales of oil products.”