Bashneft Announces Consolidated IFRS Results for 2013
OREANDA-NEWS. Bashneft Group (further "Bashneft", "The Company", or "the Group"), which comprises JSOC Bashneft, its subsidiaries and affiliates, has released its audited consolidated financial statements for the fourth quarter and the twelve months ended December 31, 2013 prepared in accordance with International Financial Reporting Standards (IFRS)
In 2013, the Group's revenue from sales increased by 5.8% year-on-year to RUB 563,296 million. Adjusted EBITDA increased by 3.6% to RUB 103,972 million. This growth was primarily driven by increased production of hydrocarbons and exports of petroleum products, as well as growing product sales in premium market segments.
'Last year the Company enjoyed remarkable success in terms of operating and financial performance,' commented Bashneft's President Alexander Korsik. 'The Company achieved the strongest production growth in the oil industry by boosting production in its traditional operating regions and also through the commissioning of the Trebs and Titov fields in the Nenets Autonomous District. An increase in operating cash flow in 2013 enabled us to pay the largest interim dividends in Bashneft's history and to continue upgrading our refineries and retail network. We also made major efforts to divest non-core assets and streamline our corporate structure through the reorganization of Sistema-Invest.'
In 2013, net income attributable to shareholders of the parent company totalled RUB 46,170 million, which is 11.7% less than in 2012. The reduction in net income was related to impairment of the Group's financial investments in OJSC Belkamneft. On September 30, 2013, JSOC Bashneft sold its stake in the share capital of OJSC Belkamneft (38.46%) to a group of private investors for RUB 6,469 million.
In the fourth quarter of 2013, the Group's revenue from sales declined by 6.6% quarter-on-quarter to RUB 146,242 million. In the fourth quarter of 2013, adjusted EBITDA amounted to RUB 26,991 million, which is 17.8% lower than in the third quarter of 2013. In the fourth quarter of 2013, net income attributable to shareholders of the parent company totalled RUB 13,628 million, which is 84.5% higher than in the third quarter of 2013; this was related to a low base effect due to the impairment mentioned above.
In 2013, the Group's operating cash flow increased by 16.2% year-on-year to RUB 82,693 million. This enabled the Group to reduce its total debt in the form of short-term and long-term borrowings by 17.6% to RUB 90,816 million as of December 31, 2013. In 2013, Bashneft's capital expenditure amounted to RUB 30,441 million, which is slightly (1.1%) less than the previous year.
In 2013, Bashneft achieved the strongest production growth in the Russian oil industry, increasing its average daily oil production by 4.4% year-on-year to 321.5 kbpd. In the fourth quarter of 2013, the Company's average daily oil production reached its highest level since 1995, and totalled 331.1 kbpd. In 2013, oil production at Bashneft's fields totalled 16,073 thousand tonnes (117,333 thousand barrels), which is 4.1% more than in 2012.
More than half (54%) of the increase in oil production in 2013 in traditional oil-producing regions was related to highly efficient geological and engineering operations and the use of state-of-the-art technology. Another factor that contributed greatly to Bashneft's production growth in 2013 consisted in commissioning of the Trebs and Titov fields in the Nenets Autonomous District.
Bashneft's refining complex in Ufa processed 21,399 thousand tonnes (156,213 thousand barrels) of oil, which is 3% more than in 2012. In 2013, refining depth at Bashneft's refineries averaged 84.7%, which is comparable to the level reached in 2012. During the same period, the share of light products increased to 60.4% from 59.7% a year earlier.
Revised data show that the average Nelson Index increased from 8.55 to 8.83 after sulphuric acid alkylation and sulphuric acid regeneration units were put into operation at the Bashneft-Novoil branch. Upgrades to a hydrocracker and a delayed coker at the Bashneft-Ufaneftekhim enanbled increased capacity and also played a role in improving Nelson Index for the Company.
Sales of petroleum products and petrochemicals added 2.9% and reached 19,816 thousand tonnes in 2013. As part of its strategy for developing its marketing channels in order to supply products to consumers, Bashneft continued to increase its share in the retail and small wholesale segment. Thus, in 2013 the Company boosted its retail sales of petroleum products by 2.8% to 1,402 thousand tonnes, while revenue from retail sales rose by 11.5%.