Gazprom Neft increases net profit by 29% in H1-2019

Gazprom Neft increases net profit by 29% in H1-2019
Published: 15 August 2019 - 8 a.m.
By: Martin Menachery
Gazprom Neft announced its consolidated IFRS financial results for the first six months and second quarter of 2019.

Gazprom Neft’s revenue in the first six months of 2019 totalled $18.32bnn, an increase of 6.8% year-on-year, with higher production growth at major projects (the Novoportovskoye and Vostochno-Messoyakhskoye fields), a more favourable pricing environment, and effective management initiatives delivering adjusted EBITDA growth of 10.8% year-on-year, at $6.16bn. Net profit attributable to Gazprom Neft shareholders totalled $3.24bn, a 29.2% increase year-on-year. Higher operating cash flow resulted in a positive free cash flow of $1.89bn in H1-2019.

Hydrocarbon production, including Gazprom Neft’s share in joint ventures, rose to 47.4 million tonnes of oil equivalent (mtoe) in H1-2019, a 5.6% increase year-on-year, as a result of higher production levels at the Novoportovskoye and Vostochno-Messoyakhskoye fields, as well as in the Orenburg region, together with a greater ownership interest in Arсtiсgas.

Refining volumes at Gazprom Neft’s own and joint venture refining assets amounted to approximately 20 million tonnes in H1-2019. These volumes are being impacted by planned repairs at the company’s Pančevo and Yaroslavl refineries.

As part of its development of its petrochemicals business, as envisaged under the company’s long-term development strategy, Gazprom Neft, together with SIBUR, consolidated 100% of the charter capital in the Poliom polypropylene plant in Omsk: the integration of refining and petrochemicals assets allowing the company to improve efficiency by using refinery feedstocks to produce high-value-added products.

The company also increased sales of oil products through premium channels in H1-2019, with sales of bitumen materials, in particular, increasing by more than 15%, sales of lubricants by 6.7%, and sales of bunkering fuels by more than 22%.

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