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Gazprom Neft delivers net profit of more than ₽217 billion in H1 2021

Press-release Efficiency
  • H1 2021 net profit has reached ₽217.2 billion
  • H1 2021 adjusted EBITDA was ₽434.6 billion — a 2.4-fold increase year-on-year
  • Net profit and adjusted EBITDA are now above the pre-crisis levels of H1 2019, following a downturn in 2020 resulting from the COVID-19 pandemic and the collapse in demand for oil products
  • Net debt to EBITDA ratio as at the end of Q2 2021 was 0.59x

Gazprom Neft (the сompany) today announces its consolidated IFRS financial results for the first six months (H1) and second quarter (Q2) of 2021.

Revenue for the first six months of 2021 was RUB1,338 trillion — a 46.6% increase year-on-year. Adjusted EBITDA1 (earnings before interest, taxes, depreciation and amortization) was up 138.8%, to ₽434.6 billion, supported by higher domestic petroleum product sales and an increase in prices of oil and petroleum products on the international and domestic markets. In H1 2021, net profit attributable to Gazprom Neft PJSC shareholders grew 26 times to ₽217.2 billion.

In H1 2021, hydrocarbon production (including Gazprom Neft’s share in joint ventures) was 48.5 million tonnes of oil equivalent (mtoe), flat year-on-year. Production volumes were supported by a 2.7% increase in gas production facilitated by the commissioning of an integrated gas treatment facility at the Vostochno-Messoyakhskoye field in July 2020, as well as the launch of infrastructure at the Tazovskoye field, the first oil and gas field in Russia to go into operation amidst the pandemic. With reserves initially in place of 419 million tonnes of oil and 225 billion cubic metres of gas, the Tazovskoye field is set to become the centre of Gazprom Neft’s new production cluster with expected annual production of 1.7 million tonnes of oil and eight billion cubic metres of gas.

In H1 2021, refining volumes at Gazprom Neft’s own refining assets and those at joint ventures increased by 5.9% year-on-year to 20.7 million tonnes. This growth was driven by recovering demand resulting from the gradual lifting of COVID-19 restrictions, as well as the commissioning of the EURO+ complex at the Moscow Refinery.

Sales of motor fuels were up by 12.3% year-on-year in H1 2021, at 9.5 million tonnes. Higher domestic passenger and cargo traffic led to a 11.2% year-on-year increase in sales of aviation fuels, while a favourable market environment for premium bitumens resulted in a 61% increase in sales of these products. In H1 2021, the сompany sold 12 million tonnes of petroleum products through its premium sales channels.

Throughout 2021, Gazprom Neft continued to develop its partnerships. During the St Petersburg International Economic Forum, the сompany signed a Memorandum of Cooperation with Shell, which covers hydrocarbon exploration and production, technological cooperation and reduction of carbon footprint. Gazprom Neft also signed an agreement with NOVATEK to establish a joint venture to develop the offshore Severo-Vrangelevsky license block, and with Tatneft to collaborate on enhanced oil recovery projects.

The сompany continues to execute its refinery modernisation programme, with investments focused on increasing production of gasoline, aviation fuels and diesel to meet the needs of the domestic Russian market. Construction of a delayed coking unit has now started at the Moscow Refinery, with equipment supplied by leading Russian companies.

“Gazprom Neft demonstrated significant growth across all key financial indicators in the first half of 2021, effectively exploiting every available market opportunity. We continue to implement our major investment projects and commission new assets across various segments of our business, while maintaining process continuity and ensuring full implementation of the company’s ANTIVIRUS programme involving COVID-19 safety measures. Eighty percent of Gazprom Neft employees now have immunity against COVID-19 and in certain divisions this number exceeds 90%.
Throughout the second half of 2021, the сompany will focus on increasing hydrocarbon production in response to new market opportunities, efficiency improvements across all processes and further technological development. One of our top priorities is ensuring high shareholder value, including through paying dividends of at least 50% of the сompany’s net profit.
The сompany continues to keep decarbonisation and environmental protection front of mind. Our goal is to deliver a 30% reduction in carbon intensity by 2030. Additionally, carbon capture, use and storage and hydrogen production technologies have the potential to become new and promising areas for our business.”
Alexander Dyukov
Alexander Dyukov CEO and Chairman of the Management Board, Gazprom Neft

1 Adjusted EBITDA includes the share of EBITDA of associated and jointly controlled companies accounted for under the equity method

Financial highlights

2Q 1Q ∆, %   6 months ∆, %
2021 2021     2021 2020
726,780 610,980 19.0 Revenue (RUB millions) 1,337,760 912,833 46.6
218,566 173,722 25.8 EBITDA (RUB millions) 392,288 147,931 165.2
241,047 193,552 24.5 Adjusted EBITDA (RUB millions) 434,599 181,980 138.8
18.05 14.63 23.4 $/boe 16.34 7.31 123.5
133,078 84,156 58.1 Profit attributable to Gazprom Neft PJSC shareholders (RUB millions) 217,234 8,232 2,538.9
257,943 129,508 99.2 Cash flow from operations (RUB millions) 387,451 172,367 124.8
162,056 42,443 281.8 Free cash flow (RUB millions) 204,499 (47,518) -
0.59 1.06 (44.3) Net debt / EBITDA 0.59 1.22 (51.6)

Operational highlights

2Q 1Q ∆, %   6 months ∆, %
2021 2021     2021 2020
179.99 178.02 1.1 Hydrocarbon production including Gazprom Neft’s share in joint ventures (mboe) 358.01 358.85 (0.2)
24.37 24.09 1.2 Hydrocarbon production including Gazprom Neft share in joint ventures (mtoe) 48.46 48.58 (0.2)
10.68 9.98 7.0 Refining throughput at the company’s own and joint-venture refineries (million tonnes) 20.66 19.50 5.9
6.49 5.47 18.6 Sales volumes through premium channels (million tonnes) 11.96 10.88 9.9
2.61 2.46 6.1 Sales volumes through filling stations (million tonnes) 5.07 4.45 13.9