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Gazprom Neft delivers net profit of more than ₽84 billion in Q1 2021

Press-release Efficiency
  • Adjusted EBITDA reaches ₽194 billion — a two-fold increase year-on-year;
  • Net debt to EBITDA ratio stands at 1.06x as at 31 March 2021.

Gazprom Neft (the “Company”) today announces its consolidated IFRS financial results for the three months ended 31 March 2021.

In Q1 2021, Gazprom Neft’s revenue increased 18.7% year-on-year to ₽611 billion. The recovery in the oil price and prices of petroleum products supported a 95.3% increase year-on-year in adjusted EBITDA1 (earnings before interest, taxes, depreciation and amortization), which reached ₽194 billion. Net profit attributable to Gazprom Neft PJSC shareholders was over ₽84 billion. The Company delivered a positive free cash flow of ₽42 billion, a 62.6% increase compared to Q1 2020.

The Company continues to demonstrate a high level of financial sustainability, with the net debt to EBITDA ratio standing at 1.06x as at 31 March 2021. Ruble-denominated loans accounted for more than 50% of the Company’s total debt as at the end of Q1 2021.

The easing of production restrictions under the OPEC+ deal resulted in a 0.5% increase in hydrocarbon production compared to Q4 2020 (including interests in joint ventures), to 24.09 million tonnes of oil equivalent (mtoe).

In Q1 2021, Gazprom Neft acquired two new licenses for geological prospecting of underlying horizons and “flank” fields in the Khanty-Mansi and Yamalo-Nenets Autonomous Okrugs, in line with its resource base development strategy.

Gazprom Neft continues to develop oil-rim deposits under long-term risk-operatorship agreements with Gazprom PJSC. In particular, Gazprom Neft has commissioned an oil-transportation system from Gazprom’s Chayandinskoye field to the East Siberia—Pacific Ocean (ESPO) trunk pipeline. The completion of infrastructure construction will enable the Company to deliver up to 1.5 million tonnes of oil per year to the ESPO.

Refining volumes at Gazprom Neft’s own and joint-venture refining assets reached 9.98 million tonnes in Q1 2021, with the Company increasing the production of high-octane gasoline by 2.4% in response to market demand.

In Q1 2021, the Company delivered a 2.8% year-on-year increase in sales of automotive gasoline, which stood at 4.48 million tonnes. While the COVID-19 pandemic resulted in a decline in sales of aviation and marine fuels, the Company demonstrated a significant increase in sales of premium bitumens, driven by the extended international customer base for these products. Gazprom Neft has begun the construction of a hydro-isodewaxing complex at its Omsk Lubricants Plant, which will produce base oils for high-tech synthetic lubricants. Additionally, as part of its business diversification, Gazprom Neft has entered the roadbuilding industry through establishing a subsidiary. Sales of petroleum products through premium sales channels reached 5.47 million tonnes in Q1 2021.

“Despite the continued impact of the COVID-19 pandemic on the global oil market, Gazprom Neft has delivered a positive net profit for the fourth consecutive quarter. In contrast to the challenging first months of 2020, we have delivered a two-fold increase in EBITDA, while decreasing the net debt to EBITDA ratio just over 1x. These results were not only supported by a more favourable market environment but also driven by the Company’s effective actions, flexibility and swift response to external factors. We will continue to develop proactively all areas of our business throughout 2021, as well as taking opportunities for diversification. We will also prioritise the establishment of our long-term ESG goals, primarily focused on reducing CO2 emissions.”
Alexander Dyukov
Alexander Dyukov CEO and Chairman of the Management Board of Gazprom Neft

Financial highlights

Q1 Q4 ∆, %   3 months ∆, %
2021 2020     2021 2020
610,980 550,046 11.1 Revenue (₽ millions) 610,980 514,568 18.7
173,722 138,923 25.0 EBITDA (₽ millions) 173,722 81,376 113.5
193,552 155,971 24.1 Adjusted EBITDA (₽ millions) 193,552 99,114 95.3
14.63 11.55 26.7 $/boe 14.63 8.16 79.3
84,156 81,506 3.3 Profit attributable to Gazprom Neft PJSC shareholders (₽ millions) 84,156 (13,806) -
129,508 207,788 (37.7) Cash flow from operations (₽ millions) 129,508 133,711 (3.1)
42,443 94,338 (55.0) Free cash flow (₽ millions) 42,443 26,098 62.6
1.06 1.32 (19.5) Net debt / EBITDA 1.06 0.88 20.5

Operational highlights

Q1 Q4 ∆, %   3 months ∆, %
2021 2020     2021 2020
178.02 177.16 0.5 Hydrocarbon production including Gazprom Neft share in joint ventures (mboe) 178.02 183.09 (2.8)
24.09 23.97 0.5 Hydrocarbon production including Gazprom Neft share in joint ventures (mtoe) 24.09 24.79 (2.8)
9.98 10.22 (2.3) Refining throughput at the company’s own and joint-venture refineries (million tonnes) 9.98 10.28 (2.9)
2.13 2.12 0.5 Gasoline production at the company’s own and joint-venture refineries (million tonnes) 2.13 2.08 2.4
5.47 5.96 (8.2) Sales volumes through premium channels (million tonnes) 5.47 5.67 (3.5)
2.46 2.64 (6.8) Sales through filling stations (million tonnes) 2.46 2.34 5.1

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