Gazprom Neft’s anti-COVID-19 programme

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Gazprom Neft 9M 2020 net profit reaches RUB36.2 billion

Press-release Efficiency
  • The Company continues to deliver a positive financial performance, maintaining financial resilience and continuity of all production processes despite negative macroeconomic environment and COVID-19 pandemic
  • Adjusted EBITDA* amounted to RUB329.2 billion in 9M 2020, and RUB147.3 billion in Q3 2020 (an increase of 77.7% Q-o-Q)
  • Net profit reached RUB36.2 billion in 9M 2020, and RUB28 billion in Q3 2020 (up 26.9% Q-o-Q)

Gazprom Neft (the “Company”) today announces its consolidated IFRS financial statements for the nine months (9M) and third quarter (Q3) of 2020.

Lower oil and petroleum product prices in the domestic and international markets continued to impact the Company’s financial performance in Q3 2020, as did the limited recovery in demand for energy resources under COVID-19 restrictions in the first half of 2020. In 9M 2020, Gazprom Neft’s revenue totalled RUB1.45 trillion and adjusted EBITDA (earnings before interest, income tax and depreciation) was RUB329.2 billion. Net profit attributable to Gazprom Neft PJSC shareholders reached RUB36.2 billion in 9M 2020.

The gradual recovery in oil prices and partial lifting of COVID-19 restrictions, as well as the optimisation of the Company’s investment programme and work on specific operating costs enabled the Company to significantly improve its financial performance and achieve a positive free cash flow.

Hydrocarbon production (including Gazprom Neft’s share in joint ventures) reached 72.1 million tonnes of oil equivalent (mtoe) in 9M 2020 (nearly unchanged year-on-year) as a result of the limits on oil production under the OPEC+ deal.

The Company has acquired subsoil usage rights to three new licence blocks, as well as expanding the area at 11 existing blocks in the Yamalo-Nenets and Khanty-Mansi Autonomous Areas. In August 2020, Gazprom Neft and Zarubezhneft established a joint venture to identify, explore and develop hard-to-recover reserves in the Khanty-Mansi Autonomous Area-Yugra, as well as developing effective technologies for these operations.

Refining volumes at Gazprom Neft’s own and joint-venture refining assets in 9M 2020 totalled 30.2 million tonnes. Recovering demand in Q3 2020 (compared to the previous quarter), as well as the completion of planned maintenance at the Yaroslavl Refinery resulted in a 15.7% Q-o-Q increase in refining volumes.

In 9M 2020, the Company sold 17.1 million tonnes of petroleum products through premium retail channels. The easing of COVID-19 restrictions had a positive impact on the sales of petroleum products through premium retail channels in Q3, with sales of motor fuels up 24.3% Q-o-Q, aviation fuel up 39%, and premium bitumen products up 21.4%. Gazprom Neft maintained its market share in specialized sectors, as well as continuing to expand its product range, including through digital solutions.

Gazprom Neft has also joined the United Nations Global Compact, the largest international corporate social responsibility (CSR) and sustainable development initiative, confirming its commitment to sustainable development principles, maximum transparency, partnerships, and exchange of best practices with the international community.

«In line with our expectations, in the third quarter Gazprom Neft improved its financial performance, showing an increase in net profit compared to the second quarter. We continue to take a highly disciplined approach to cutting costs and are implementing a range of initiatives aimed at improving the Company’s operational efficiency amidst low oil prices and slower demand for oil and oil products. Our “Antivirus” campaign continues to ensure the company’s employees, partners and customers have a high level of protection against COVID-19. Gazprom Neft also continues to focus on sustainable development and joined the UN Global Compact in Q3 2020, which is a major milestone for the Company».
Alexander Dyukov
Alexander Dyukov CEO and Chairman of the Management Board of Gazprom Neft

Financial highlights

3Q 2Q ∆, %   9 months ∆, %
2020 2020     2020 2019
536,741 398,265 34.8 Revenue (RUB millions) 1,449,574 1,871,438 (22.5)
128,521 66,555 93.1 EBITDA (RUB millions) 276,452 555,253 (50.2)
147,252 82,866 77.7 Adjusted EBITDA (RUB millions) 329,232 615,511 (46.5)
11.52 6.52 76.7 $/boe 8.74 17.81 (50.9)
27,961 22,038 26.9 Profit attributable to Gazprom Neft PJSC shareholders (RUB millions) 36,193 319,973 (88.7)
136,902 38,656 254.2 Cash flow from operations (RUB millions) 309,269 460,301 (32.8)
50,758 (76,911) - Free cash flow (RUB millions) (4,064) 154,729 -
1.50 1.22 23.0 Net debt / EBITDA 1.50 0.56 167.9

Operational highlights

3Q 2Q ∆, %   9 months ∆, %
2020 2020     2020 2019
173.73 175.76 (1.2) Hydrocarbon production including Gazprom Neft share in joint ventures (mboe) 532.58 531.14 0.3
23.51 23.79 (1.2) Hydrocarbon production including Gazprom Neft share in joint ventures (mtoe) 72.09 71.93 0.2
10.67 9.22 15.7 Refining throughput at the company's own and jointventure refineries (million tonnes) 30.17 31.08 (2.9)
6.22 5.21 19.4 Sales volume through premium channels (million tonnes) 17.10 20.11 (15.0)
2.68 2.11 27.0 Sales volume through filling stations (million tonnes) 7.13 7.80 (8.6)

1 Adjusted EBITDA includes proportional EBITDA from associated and jointly controlled companies, equity accounting method.