Rosneft Announce Financial results for 3Q 2018

Posted On November 7th, 2018 - 4:34 pm | by Oil and gas press

3Q 2018 revenue amounted to RUB 2,286 bln (USD 35.8 bln) increasing by 10.7% QoQ in RUB terms. The increase was driven by production ramp-up on the back of OPEC+ Agreement restrictions easing with Urals price growth by over 8% in RUB terms.

9М 2018 revenue increased by more than 1.4 times YoY up to RUB 6,073 bln (USD 100.6 bln) mainly due to favorable price dynamics and increased equity share in profits of the Russian and international projects.

EBITDA

3Q 2018 EBITDA reached RUB 643 bln (USD 9.8 bln). Increase in EBITDA was due to QoQ oil price growth (+2.4% in USD terms) on the back of negative export duty lag effect accompanied with administrative expenses reduction.

Lifting costs were at 193 RUB/boe (or 2.9 USD/boe) in 3Q 2018 compared to 192 RUB/boe (or 3.1 USD/boe) in 2Q 2018. Slight increase in cost dynamics in RUB terms was mainly driven by the recovery of the production capacity after easing of OPEC+ restrictions.

9M 2018 YoY increase in lifting costs (from 181 to 190 RUB/boe) was mainly driven by increased repair and maintenance of a growing well stock, oil field services and higher natural monopolies tariffs.

EBITDA margin exceeded 27% in 3Q 2018 and 25% in 9M 2018 on the back of the favorable external environment and the Company’s efforts to increase efficiency of operating activity.

Highlight
3Q 2018 EBITDA growth by 13.8% QoQ up to RUB 643 bln, 9M 2018 EBITDA growth by 1.6 times YoY up to RUB 1,593 bln with margins improvement

9M 2018 Net Income jumped by 3.4 times YoY up to RUB 451 bln

Free Cash Flow improvement in 3Q 2018 by more than 2 times QoQ up to RUB 509 bln and over 4 times YoY up to RUB 872 bln

Achieved annual targets on debt burden reduction and working capital improvement:
– trading liabilities and debt burden decrease by USD equivalent of 12 bln vs. the year beginning level

– working capital reduction by more than USD 3.2 bln vs. the year beginning level

Commenting the results for 3Q 2018, Rosneft Chairman of the Management Board and Chief Executive Officer Igor Sechin said:

“Currently the Company faces serious market challenges including extremely volatile crude price environment, uncertain outlook for the world economic growth in 2019, rising interest rates on the global capital markets (incl. Russia) as well as new regulatory approaches for petroleum products pricing on the domestic market. Increasing free cash flow generation and reducing the debt burden become our key strategic goals under these tough conditions. Successively moving towards their achievement the Company executed its plans to reduce debt and working capital announced earlier in May well ahead of schedule. The total amount of trade prepayments outstanding and net financial debt was reduced by USD equivalent of ca. 12 bln year to date.

Organic growth and monetization of synergies from integration of newly acquired assets remain our key near-term priorities. We will continue to focus on cost control, highly selective CAPEX program and free cash flow generation for further deleveraging.”

Source / More : Rosneft

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