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PJSC Gazprom Neft (GAZ)

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Thursday 16 August, 2018

PJSC Gazprom Neft

IFRS Financial Statements June 30, 2018

RNS Number : 0526Y
PJSC Gazprom Neft
16 August 2018
 

 

Gazprom Neft Group

Interim Condensed Consolidated Financial Statements (unaudited)

As of and for the three and six months ended 30 June 2018

 

Gazprom Neft Group

Interim Condensed Consolidated Statement of Financial Position (unaudited)

Currency - RUB millions




Notes

30 June 2018

31 December 2017

Assets






Current assets






Cash and cash equivalents


3

66,237

90,608


Short-term financial assets



4,735

10,449


Trade and other receivables


4

132,701

102,262


Inventories


5

145,335

118,322


Current income tax prepayments



1,935

2,540


Other taxes receivable


6

76,182

58,359


Other current assets


7

36,916

40,047


Total current assets



464,041

422,587


Non-current assets






Property, plant and equipment


8

2,179,877

2,052,275


Goodwill and other intangible assets



74,365

74,187


Investments in associates and joint ventures

9

292,588

256,758


Long-term trade and other receivables



1,033

901


Long-term financial assets



8,449

31,293


Deferred income tax assets



18,958

17,867


Other non-current assets


10

74,083

74,140


Total non-current assets



2,649,353

2,507,421


Total assets



3,113,394

2,930,008

Liabilities and equity






Current liabilities






Short-term debt and current portion of long-term debt

11

68,611

131,760


Current finance lease liabilities


16

1,572

1,397


Trade and other payables


12

169,752

194,438


Other current liabilities


13

39,245

32,500


Current income tax payable



6,795

4,534


Other taxes payable


14

109,415

84,833


Provisions and other accrued liabilities



18,719

29,873


Total current liabilities



414,109

479,335


Non-current liabilities






Long-term debt


15

606,210

548,654


Non-current finance lease liabilities


16

22,092

20,826


Other non-current financial liabilities


17

38,098

48,569


Deferred income tax liabilities



113,396

102,583


Provisions and other accrued liabilities



69,118

62,574


Other non-current liabilities



11,734

8,334


Total non-current liabilities



860,648

791,540


Equity






Share capital



98

98


Treasury shares



(1,170)

(1,170)


Additional paid-in capital



63,131

62,256


Retained earnings



1,574,816

1,431,931


Other reserves



85,500

60,142


Equity attributable to Gazprom Neft shareholders


1,722,375

1,553,257


Non-controlling interest



116,262

105,876


Total equity



1,838,637

1,659,133


Total liabilities and equity



3,113,394

2,930,008














A. V. Dyukov



A. V. Yankevich


Chief Executive Officer



Chief Financial Officer


PJSC Gazprom Neft



PJSC Gazprom Neft

 

The accompanying notes are an integral part of these Interim Condensed Consolidated Financial Statements


 

Gazprom Neft Group

Interim Condensed Consolidated Statement of Profit and Loss and Other Comprehensive Income (unaudited)

Currency - RUB millions (except per share data)

 


 

Notes

3 months ended

30 June 2018

3 months ended

30 June 2017

6 months ended

30 June 2018

6 months ended

30 June 2017

Revenue






Crude oil, gas and petroleum products sales


600,224

443,410

1,104,579

883,397

Other revenue


16,879

16,228

33,157

30,935

Total revenue from sales

23

617,103

459,638

1,137,736

914,332

Costs and other deductions






Purchases of oil, gas and petroleum products


(143,479)

(109,997)

(266,097)

(226,960)

Production and manufacturing expenses


(56,672)

(54,059)

(108,172)

(100,372)

Selling, general and administrative expenses


(28,412)

(24,237)

(52,623)

(47,948)

Transportation expenses


(34,106)

(34,744)

(70,786)

(71,394)

Depreciation, depletion and amortisation


(42,340)

(33,984)

(79,849)

(66,294)

Taxes other than income tax

14

(166,033)

(111,644)

(307,108)

(226,031)

Export duties


(20,674)

(18,446)

(42,273)

(41,975)

Exploration expenses


(186)

(42)

(455)

(146)

Total operating expenses


(491,902)

(387,153)

(927,363)

(781,120)

Operating profit


125,201

72,485

210,373

133,212

Share of profit of associates and joint ventures

25,589

7,892

40,357

18,710

Net foreign exchange (loss) / gain

18

(19,939)

(7,477)

(24,317)

5,705

Finance income


1,082

2,713

2,930

5,226

Finance expense

19

(5,465)

(6,543)

(11,410)

(13,261)

Other loss, net


(2,964)

(2,513)

(5,629)

(3,379)

Total other expenses


(1,697)

(5,928)

1,931

13,001

Profit before income tax


123,504

66,557

212,304

146,213

Current income tax expense


(16,835)

(10,450)

(27,941)

(20,614)

Deferred income tax expense


(3,675)

(2,790)

(7,224)

(7,548)

Total income tax expense


(20,510)

(13,240)

(35,165)

(28,162)

Profit for the period


102,994

53,317

177,139

118,051

Other comprehensive income - to be reclassified to profit or loss






Currency translation differences


11,594

23,013

15,619

10,614

Cash flow hedge, net of tax


8,506

856

14,657

5,905

Other comprehensive income


4

479

7

497

Other comprehensive income


20,104

24,348

30,283

17,016

Total comprehensive income for the period


123,098

77,665

207,422

135,067

Profit attributable to:






 - Gazprom Neft shareholders


96,810

49,316

166,475

111,269

 - Non-controlling interest

6,184

4,001

10,664

6,782

Profit for the period


102,994

53,317

177,139

118,051

Total comprehensive income attributable to:






 - Gazprom Neft shareholders


113,899

64,652

191,833

123,136

 - Non-controlling interest


9,199

13,013

15,589

11,931

Total comprehensive income for the period


123,098

77,665

207,422

135,067

Earnings per share attributable to Gazprom Neft shareholders






Basic earnings (RUB per share)


20.52

10.45

35.29

23.58

Diluted earnings (RUB per share)


20.52

10.45

35.29

23.58

Weighted-average number of common shares

   outstanding (millions)


4,718

4,718

4,718

4,718







The accompanying notes are an integral part of these Interim Condensed Consolidated Financial Statements


Gazprom Neft Group

Interim Condensed Consolidated Statement of Changes in Equity (unaudited)

Currency - RUB millions

 


Attributable to Gazprom Neft shareholders




Share capital

Treasury shares

Additional paid-in capital

Retained earnings

Other reserves

Total

Non-controlling interest

Total

equity

Balance as of 1 January 2018

98

(1,170)

62,256

1,431,931

60,142

1,553,257

105,876

1,659,133

Profit for the period

-

-

-

166,475

-

166,475

10,664

177,139

Other comprehensive income









Currency translation differences

-

-

-

-

10,694

10,694

4,925

15,619

Cash flow hedge, net of tax

-

-

-

-

14,657

14,657

-

14,657

Other comprehensive income

-

-

-

-

7

7

-

7

Total comprehensive income for the period

-

-

-

166,475

25,358

191,833

15,589

207,422

Transactions with owners, recorded in equity









Dividends to equity holders

-

-

-

(23,590)

-

(23,590)

(5,203)

(28,793)

Transaction under common control

-

-

875

-

-

875

-

875

Total transactions with owners

-

-

875

(23,590)

-

(22,715)

(5,203)

(27,918)

Balance as of 30 June 2018

98

(1,170)

63,131

1,574,816

85,500

1,722,375

116,262

1,838,637

 


Attributable to Gazprom Neft shareholders




Share capital

Treasury shares

Additional paid-in capital

Retained earnings

Other reserves

Total

Non-controlling interest

Total equity

Balance as of 1 January 2017

98

(1,170)

51,047

1,276,210

33,955

1,360,140

84,027

1,444,167

Profit for the period

-

-

-

111,269

-

111,269

6,782

118,051

Other comprehensive income / (loss)









Currency translation differences

-

-

-

-

5,465

5,465

5,149

10,614

Cash flow hedge, net of tax

-

-

-

-

5,905

5,905

-

5,905

Other comprehensive income

-

-

-

-

497

497

-

497

Total comprehensive income for the period

-

-

-

111,269

11,867

123,136

11,931

135,067

Transactions with shareholders, recorded in equity









Dividends to equity holders

-

-

-

(50,388)

-

(50,388)

(1,697)

(52,085)

Transaction under common control

-

-

7,617

-

-

7,617

-

7,617

Total transactions with shareholders

-

-

7,617

(50,388)

-

(42,771)

(1,697)

(44,468)

Balance as of 30 June 2017

98

(1,170)

58,664

1,337,091

45,822

1,440,505

94,261

1,534,766

 

The accompanying notes are an integral part of these Interim Condensed Consolidated Financial Statements


Gazprom Neft Group

Interim Condensed Consolidated Statement of Cash Flows (unaudited)

Currency - RUB millions

 


 

Notes

6 months ended

30 June 2018

6 months ended

30 June 2017

Cash flows from operating activities




Profit before income tax


212,304

146,213

Adjustments for:




Share of profit of associates and joint ventures


(40,357)

(18,710)

Net foreign exchange loss / (gain)

18

24,317

(5,705)

Finance income


(2,930)

(5,226)

Finance expense

19

11,410

13,261

Depreciation, depletion and amortisation


79,849

66,294

Other non-cash items


2,822

2,644

Operating cash flow before changes in working capital


287,415

198,771

Changes in working capital:




  Accounts receivable


(24,232)

15,067

  Inventories


(25,537)

9,073

  Taxes receivable


(18,031)

(5,193)

  Other assets


3,478

(4,067)

  Accounts payable


10,830

3,682

  Taxes payable


24,253

(414)

  Other liabilities


(3,296)

(1,445)

Total effect of working capital changes


(32,535)

16,703

Income taxes paid


(24,984)

(14,835)

Interest paid


(25,079)

(20,283)

Dividends received


5,472

772

Net cash provided by operating activities


210,289

181,128

Cash flows from investing activities




Acquisition of subsidiaries, net of cash acquired

6

-

Acquisition of investments in joint ventures

(256)

(457)

Disposal of investments in joint ventures


-

476

Bank deposits placement


(70)

(417)

Repayment of bank deposits


7,186

1,071

Short-term loans issued


(28)

-

Repayment of short-term loans issued


201

883

Long-term loans issued


(523)

(1,075)

Repayment of long-term loans issued


12,477

2,468

Purchases of property, plant and equipment and intangible assets

(162,755)

(154,235)

Proceeds from sale of property, plant and equipment, intangible assets

1,159

194

Interest received


11,890

3,074

Net cash used in investing activities


(130,713)

(148,018)

Cash flows from financing activities




Proceeds from short-term borrowings


1,499

318

Repayment of short-term borrowings


(974)

(4,602)

Proceeds from long-term borrowings


187,389

158,239

Repayment of long-term borrowings


(246,521)

(149,820)

Transaction costs directly attributable to the borrowings received


(63)

-

Dividends paid to Gazprom Neft shareholders


(47,183)

(2)

Dividends paid to non-controlling interest


(3,315)

(716)

Repayment of finance lease liabilities


(727)

(244)

Net cash (used in) / provided by financing activities


(109,895)

3,173

(Decrease) / increase in cash and cash equivalents


(30,319)

36,283

Effect of foreign exchange on cash and cash equivalents


5,948

(148)

Cash and cash equivalents as of the beginning of the period


90,608

33,621

Cash and cash equivalents as of the end of the period


66,237

69,756

 

The accompanying notes are an integral part of these Interim Condensed Consolidated Financial Statements.


Gazprom Neft Group

Notes to the Interim Condensed Consolidated Financial Statements (unaudited)

As of and for the three and six months ended 30 June 2018

Currency - RUB millions (unless otherwise stated)

1.         General

Description of business

PJSC Gazprom Neft (the "Company") and its subsidiaries (together referred to as the "Group") is a vertically integrated oil company operating in the Russian Federation, CIS and internationally. The Group's principal activities include exploration, production and development of crude oil and gas, production of refined petroleum products and distribution and marketing operations through its retail outlets.

The Company was incorporated in 1995 and is domiciled in the Russian Federation. The Company is a public joint stock company and was set up in accordance with Russian regulations. PJSC Gazprom ("Gazprom", a state controlled entity), the Group's ultimate parent company, owns 95.7% of the shares in the Company.

2.         Summary of significant accounting policies

Basis of preparation

The Group maintains its books and records in accordance with accounting and taxation principles and practices mandated by legislation in the countries in which it operates (primarily the Russian Federation). The accompanying Interim Condensed Consolidated Financial Statements were primarily derived from the Group's statutory books and records with adjustments and reclassifications made to present them in accordance with International Financial Reporting Standards ("IFRS").

The Interim Condensed Consolidated Financial Statements have been prepared in accordance with International Accounting Standard IAS 34 Interim Financial Reporting.

The Group does not disclose information which would substantially duplicate the disclosures contained in its audited Consolidated Financial Statements as of and for the year ended 31 December 2017, such as significant accounting policies, estimates and judgements, financial risk disclosures or disclosures of financial line items, which have not changed significantly in amount or composition. These Interim Condensed Consolidated Financial Statements should be read in conjuction with the Group's Consolidated Financial Statements for 2017 prepared in accordance with IFRS.

Subsequent events occurring after 30 June 2018 were evaluated through 15 August 2018, the date these Interim Condensed Consolidated Financial Statements were authorised for issue.

The results for the three and six months ended 30 June 2018 are not necessarily indicative of the results expected for the full year.

The Group as a whole is not subject to significant seasonal fluctuations.

Changes in significant accounting policies

Significant accounting policies, judgements and estimates applied while preparing these Interim Condensed Consolidated Financial Statements are consistent with those applied during the preparation of the Consolidated Financial Statements as of and for the year ended 31 December 2017, except for those described below.



Application of new IFRS

Impact of adoption

The Group has adopted IFRS 9 - Financial instruments and IFRS 15 - Revenue from contracts with Customers from 1 January 2018 which resulted in changes in accounting policies and adjustments to the amounts recognized in the financial statements.

·      IFRS 9 was generally adopted without restating comparative information; no significant adjustments were recognized in financial statements. The changes in classification categories didn't result in changes of presentation in Interim Condensed Consolidated Statement of Financial Position.

·      In accordance with the transition provisions in IFRS 15, the Group has adopted the new rules retrospectively and has restated comparatives for 2017 financial year.

In summary, the following adjustments were made to amounts recognized in Interim Condensed Consolidated Statement of Profit and Loss and Other Comprehensive Income:


6 months ended

30 June 2017

Reclassification

6 months ended

30 June 2017 (restated)

Revenue




Crude oil, gas and petroleum products sales

842,246

41,151

883,397

Other revenue

30,111

824

30,935

Total revenue from sales

872,357

41,975

914,332

Costs and other deductions




Export duties

-

(41,975)

(41,975)

Total operating expenses

(739,145)

(41,975)

(781,120)

Operating profit

133,212

-

133,212

 

·      Reclassification of expenses with regard to export duties in the amount of RUB 42.0 billion,

·      Reclassification of revenue from transportation services included in contract price from Sales of petroleum products to Other revenue in the amount of RUB 0.8 billion,

·      Crude oil, gas and petroleum products sales are presented net of sales related excises in the amount of RUB 29.9 billion.

Other new standards and pronouncements. The following other new standards and pronouncements which became effective did not have any material impact on the Group:

·      Amendments to IFRS 2 - Share-based Payment (issued on 20 June 2016 and effective for annual periods beginning on or after 1 January 2018).

·      Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts - Amendments to IFRS 4 (issued on 12 September 2016 and effective, depending on the approach, for annual periods beginning on or after 1 January 2018 for entities that choose to apply temporary exemption option, or when the entity first applies IFRS 9 for entities that choose to apply the overlay approach).

·      Transfers of Investment Property - Amendments to IAS 40 (issued on 8 December 2016 and effective for annual periods beginning on or after 1 January 2018).

·      Annual Improvements to IFRSs 2014-2016 cycle ‒ Amendments to IFRS 1 an IAS 28 (issued on 8 December 2016 and effective for annual periods beginning on or after 1 January 2018).

·      IFRIC 22 - Foreign currency transactions and advance consideration (issued on 8 December 2016 and effective for annual periods beginning on or after 1 January 2018).

Accounting policies applied from 1 January 2018

IFRS 9 - Financial Instruments (amended in July 2014 and effective for annual periods beginning on or after 1 January 2018)

From 1 January 2018 the Group classifies its financial assets in the following measurement categories: those to be measured subsequently at fair value through profit or loss (FVPL), those to be measured subsequently at fair value through other comprehensive income (FVOCI), and those to be measured subsequently at amortized cost.

The classification of debt instruments depends on the organization's business model for managing financial assets and whether contractual cash flows of an asset give rise to payments on specified dates that are solely payments of principal and interest ("SPPI").

The Group presents in OCI changes in the fair value of all its equity investments previously classified as available-for-sale, because these investments are held as long-term strategic investments that are not expected to be sold in the short-to-medium term.

Financial assets and liabilities previously classified in accordance with IAS 39 "Financial Instruments: Recognition and Measurement" within categories loans and receivables, investments held to maturity and other financial liabilities measured at amortised cost using the effective interest method, in accordance with IFRS 9 "Financial instruments" are classified as financial assets and financial liabilities carried at amortised cost. Measurement of cash and cash equivalents, trade and other receivables and payables, long-term and short-term loans and investments, held-to-maturity investments has not changed and these financial instruments are measured at amortised cost.

The adoption of IFRS 9 did not significantly impact balance sheet classification of financial assets and liabilities in the Interim Condensed Consolidated Financial Statements of the Group. The amount of expected credit losses as at 1 January 2018 does not materially differ from the amount of recognized provisions and allowances in the Consolidated Financial Statements as at 31 December 2017 and therefore there is no quantitative effect of transition as of 1 January 2018.

New model for recognition of impairment losses - expected credit losses (ECL) model was introduced within the Group. For all trade receivables the Group applies simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance. To measure the expected credit losses, trade receivables are grouped based on shared credit risk characteristics, type of products or services and the days past due. The Group calculates expected loss rates for trade receivables based on historical data which are a reasonable approximation of current loss rates.

In the reporting period the Group continued to apply IAS 39 for hedge accounting. In case of new hedging instruments arise the Group may revise its plans to switch to IFRS 9 in respect of hedging instruments in the following reporting periods.



IFRS 15 - Revenue from Contracts with Customers (amended in April 2016 and effective for annual periods beginning on or after 1 January 2018)

The Group recognizes Revenue from sales of crude oil, petroleum products, gas and other products and services when it satisfies a performance obligation and control over goods and services is passed. For the most contracts control over goods or services passes to a customer at point of time and consideration is unconditional because only the passage of time is required before the payment is due. Specifically:

·      For export contracts control generally passes to buyer on the border of the Russian Federation, the Group is not responsible for transportation,

·      For domestic contracts control generally passes when products are dispatched or delivered to customer. When control passes on delivery to customer transportation is not considered as a distinct performance obligation. In most contracts when control passes on dispatch the Group is not responsible for transportation or transportation is a distinct service provided to customer within a separate contract. In case of sales of petroleum products and transportation by railway performance obligation for transportation is considered to be distinct and excluded from contract price. The Group recognizes this type of revenue within Other revenue line.

The transaction price excludes amounts collected on behalf of third parties such as value added tax and sales related tax. The Group doesn't consider export duties as a part of transaction price and includes expenses with regard to export duties within operating expenses.

New accounting standards

IFRS 16 - Leases (issued on 13 January 2016 and effective for annual periods beginning on or after 1 January 2019). The new standard sets out the principles for the recognition, measurement, presentation and disclosure of leases. All leases result in the lessee obtaining the right to use an asset at the start of the lease and, if lease payments are made over time, also obtaining financing. Accordingly, IFRS 16 eliminates the classification of leases as either operating leases or finance leases as is required by IAS 17 and, instead, introduces a single lessee accounting model. Lessees will be required to recognize: (a) assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value; and (b) depreciation of lease assets separately from interest on lease liabilities in the statement of profit and loss and other comprehensive income.

The following other new standards and pronouncements are not expected to have any material impact on the Group when adopted:

·           IFRS 17 - Insurance Contracts (issued on 18 May 2017 and effective for annual periods beginning on or after 1 January 2021).

·           IFRIC 23 - Uncertainty over Income Tax Treatments (issued on 7 June 2017 and effective for annual periods beginning on or after 1 January 2019).

·           Sale or Contribution of Assets between an Investor and its Associate or Joint Venture - Amendments to IFRS 10 and IAS 28 (issued on 11 September 2014 and effective for annual periods beginning on or after a date to be determined by the IASB).

·           Prepayment Features with Negative Compensation - Amendments to IFRS 9 (issued on 12 October 2017 and effective for annual periods beginning on or after 1 January 2019).

·           Long-term Interests in Associates and Joint Ventures - Amendments to IAS 28 (issued on 12 October 2017 and effective for annual periods beginning on or after 1 January 2019).


3.         Cash and cash equivalents

Cash and cash equivalents as of 30 June 2018 and 31 December 2017 comprise the following:


30 June 2018

31 December 2017

Cash on hand

985

946

Cash in bank

32,628

46,107

Deposits with original maturity of less than three months

28,855

28,816

Other cash equivalents

3,769

14,739

Total cash and cash equivalents

66,237

90,608

 

 

4.         Trade and other receivables

Trade and other receivables as of 30 June 2018 and 31 December 2017 comprise the following:


30 June 2018

31 December 2017

Trade receivables

138,243

107,758

Other financial receivables

2,158

2,071

Less impairment provision                                                                 

(7,700)

(7,567)

Total trade and other receivables

132,701

102,262

 

 

5.         Inventories

Inventories as of 30 June 2018 and 31 December 2017 consist of the following:


30 June 2018

31 December 2017

Petroleum products and petrochemicals

69,096

55,828

Crude oil and gas

35,654

28,200

Materials and supplies

25,727

23,143

Other

14,858

11,151

Total inventory

145,335

118,322

 

 

6.         Other taxes receivable

Other taxes receivable as of 30 June 2018 and 31 December 2017 comprise the following:


30 June 2018

31 December 2017

Value added tax receivable

70,336

50,163

Prepaid custom duties

2,305

5,076

Other taxes prepaid

3,541

3,120

Total other taxes receivable

76,182

58,359

 

 

7.         Other current assets

Other current assets as of 30 June 2018 and 31 December 2017 comprise the following:


30 June 2018

31 December 2017

Advances paid

19,740

24,503

Prepaid expenses

4,364

1,955

Other assets                                                                                       

12,812

13,589

Total other current assets, net

36,916

40,047

 

 

8.         Property, plant and equipment

Movements in property, plant and equipment for the six months ended 30 June 2018 and 2017 are as follows:

Cost

O&G properties

Refining assets

Marketing and distribution

Other assets

Assets under constru-ction

Total

As of 1 January 2018

1,772,103

347,738

189,603

26,638

538,965

2,875,047

Additions

1,803

791

-

-

153,345

155,939

Changes in decommissioning obligations

2,232

-

-

-

-

2,232

Capitalised borrowing costs

-

-

-

-

17,918

17,918

Transfers

79,831

11,405

6,208

1,070

(98,514)

-

Internal movement

(682)

(4)

1,668

140

(1,122)

-

Reclassification from other non-current assets

1,003

3,405

602

-

-

5,010

Disposals

(1,993)

(646)

(320)

(802)

(215)

(3,976)

Translation differences

30,272

4,280

4,920

138

6,063

45,673

As of 30 June 2018

1,884,569

366,969

202,681

27,184

616,440

3,097,843

Depreciation and impairment







As of 1 January 2018

(649,937)

(105,090)

(60,290)

(7,455)

-

(822,772)

Depreciation charge

(61,142)

(8,120)

(6,107)

(1,323)

-

(76,692)

Internal movement

(21)

5

13

3

-

-

Reclassification from other non-current assets

(132)

(1,780)

-

-

-

(1,912)

Disposals

1,250

331

105

467

-

2,153

Translation differences

(15,739)

(1,307)

(1,622)

(75)

-

(18,743)

As of 30 June 2018

(725,721)

(115,961)

(67,901)

(8,383)

-

(917,966)

Net book value







As of 1 January 2018

1,122,166

242,648

129,313

19,183

538,965

2,052,275

As of 30 June 2018

1,158,848

251,008

134,780

18,801

616,440

2,179,877

 

Capitalized borrowing costs for the six months ended 30 June 2018 include interest expense in the amount of RUB 14.6 billion and exchange losses arising from foreign currency borrowings in the amount of RUB 3.3 billion.

 

Cost

O&G properties

Refining assets

Marketing and distribution

Other assets

Assets under constru-ction

Total

As of 1 January 2017

1,569,525

308,192

152,871

23,531

369,304

2,423,423

Additions

670

898

-

-

194,430

195,998

Changes in decommissioning obligations

(3)

-

-

-

-

(3)

Capitalised borrowing costs

-

-

-

-

14,811

14,811

Transfers

65,727

5,563

28,110

1,217

(100,617)

-

Internal movement

(550)

12

158

108

272

-

Disposals

(1,870)

(785)

(333)

(293)

(754)

(4,035)

Translation differences

216

4,515

3,224

133

(850)

7,238

As of 30 June 2017

1,633,715

318,395

184,030

24,696

476,596

2,637,432

Depreciation and impairment







As of 1 January 2017

(553,140)

(89,106)

(49,052)

(5,780)

-

(697,078)

Depreciation charge

(50,070)

(6,510)

(5,366)

(1,102)

-

(63,048)

Internal movement

91

-

(10)

(81)

-

-

Disposals

1,126

126

171

282

-

1,705

Translation differences

1,954

(1,286)

(776)

(46)

-

(154)

As of 30 June 2017

(600,039)

(96,776)

(55,033)

(6,727)

-

(758,575)

Net book value







As of 1 January 2017

1,016,385

219,086

103,819

17,751

369,304

1,726,345

As of 30 June 2017

1,033,676

221,619

128,997

17,969

476,596

1,878,857

 

 

9.         Investments in associates and joint ventures

The carrying values of the investments in associates and joint ventures as of 30 June 2018 and 31 December 2017 are summarised below:



30 June 2018

31 December 2017



Ownership percentage

Carring value

Ownership percentage

Carring value

Slavneft

Joint venture

119,708

111,679

Arcticgas

Joint venture

123,447

105,157

Messoyakha

Joint venture

29,336

17,965

Northgas

Joint venture

10,177

12,568

Others



9,920


9,389

      Total investments


292,588


256,758

 

The principal place of business of the most significant joint ventures and associates disclosed above is the Russian Federation.

Slavneft

PJSC NGK Slavneft and it's subsidiaries (Slavneft) are engaged in exploration, production and development of crude oil and gas and production of refined petroleum products. The control over Slavneft is divided equally between the Group and PJSC NK Rosneft.

Arcticgas

In January 2018 SeverEnergy LLC and Yamal Razvitie LLC were merged to JSC Arctic Gas Company (Arcticgas, an entity jointly controlled by the Group and PJSC NOVATEK). In March 2018 the loans issued by Gazprom Neft were converted to ordinary shares from additional share emission of Arcticgas. As result the Group's investment in Arcticgas (previously was held through SeverEnergy LLC and Yamal Razvitie LLC) increased from 46.7% as of 31 December 2017 to 50.0% as of 30 June 2018.

Arcticgas is developing the Samburgskoye, Urengoiskoe and Yaro-Yakhinskoye oil and gas condensate fields and some other small oil and gas condensate fields located in the Yamalo-Nenetskiy autonomous region of the Russian Federation.

Northgas

CJSC Northgas (Northgas) is engaged in development of Severo-Urengoiskoe natural gas and oil field. The Group's investment in Northgas is held through Gazprom Resource Northgas LLC which is controlled by the Group and owns a 50% share in Northgas. The control over Northgas is divided equally between the Group and PJSC NOVATEK.

Messoyakha

JSC Messoyakhaneftegas (Messoyakha) is developing the Vostochno-Messoyakhskoe and Zapadno-Messoyakhskoe oil and gas condensate fields. The control over Messoyakha is divided equally between the Group and PJSC NK Rosneft.

The summarised financial information for the significant associates and joint ventures as of 30 June 2018 and 31 December 2017 and for the six months ended 30 June 2018 and 2017 is presented in the tables below.

30 June 2018

Slavneft

Arcticgas

Messoyakha

Northgas

Cash and cash equivalents

1,901

20,704

2

1,943

Other current assets

72,327

21,938

17,854

3,719

Non-current assets

362,012

373,300

165,806

47,117

Current financial liabilities

(43,643)

(31,428)

(4,700)

(6,708)

Other current liabilities

(36,973)

(15,079)

(6,292)

(85)

Non-current financial liabilities

(86,377)

(94,113)

(105,717)

(19,053)

Other non-current liabilities

(42,880)

(50,268)

(8,699)

(5,206)

Net assets

226,367

225,054

58,254

21,727

 

 

31 December 2017

Slavneft

SeverEnergy

(Arcticgas)

Messoyakha

Northgas

Cash and cash equivalents

4,153

8,658

1

1,409

Other current assets

54,479

133,617

18,654

3,256

Non-current assets

344,997

259,175

152,469

54,065

Current financial liabilities

(34,666)

(49,851)

(4,913)

(6,379)

Other current liabilities

(29,617)

(18,495)

(4,812)

(77)

Non-current financial liabilities

(88,198)

(91,811)

(116,815)

(21,109)

Other non-current liabilities

(41,229)

(52,465)

(9,072)

(4,656)

Net assets

209,919

188,828

35,512

26,509

 

 

6 months ended

30 June 2018

Slavneft

Arcticgas

Messoyakha

Northgas

Revenue

148,009

94,019

54,086

11,081

Depreciation and amortisation

(18,756)

(10,928)

(10,243)

(1,262)

Finance income

227

377

-

480

Finance expense

(4,470)

(5,655)

(3,710)

(1,154)

Total income tax expense

(4,105)

(8,107)

(3,704)

(859)

Profit for the period

16,484

36,226

22,742

3,419

Total comprehensive income for the period

16,484

36,226

22,742

3,419

 

 

6 months ended

30 June 2017

Slavneft

SeverEnergy

(Arcticgas)

Messoyakha

Northgas

Revenue

111,410

67,892

24,051

10,889

Depreciation and amortisation

(17,800)

(11,092)

(4,151)

(1,178)

Finance income

593

563

3

569

Finance expense

(2,578)

(10,256)

(3,309)

(1,449)

Total income tax expense

(1,813)

(2,976)

(2,028)

(816)

Profit for the period

8,757

16,568

8,344

3,262

Total comprehensive income for the period

8,838

16,568

8,344

3,262

 

Others

The aggregate carrying amount of all individually immaterial associates and joint ventures as well as the Group's share of those associates' and joint ventures' profit or loss and other comprehensive income are not significant for both reporting dates and periods.

 

10.       Other non-current assets

Other non-current assets are primarily comprised of advances provided on capital expenditures (RUB 68.8 billion and RUB 69.3 billion as of 30 June 2018 and 31 December 2017, respectively).

 

11.       Short-term debt and current portion of long-term debt

As of 30 June 2018 and 31 December 2017 the Group has short-term debt and current portion of long-term debt outstanding as follows:


30 June 2018

31 December 2017

Current portion of long-term debt

67,636

131,360

Other borrowings

975

400

Total short-term debt and current portion of long-term debt

68,611

131,760

 

 

12.       Trade and other payables

Accounts payable as of 30 June 2018 and 31 December 2017 comprise the following:


30 June 2018

31 December 2017

Trade accounts payable

124,996

118,151

Dividends payable

27,966

49,520

Forward contracts - cash flow hedge

-

16,758

Other accounts payable

16,790

10,009

Total trade and other payables

169,752

194,438

 

During the six months ended 30 June 2018 the Group paid an interim dividend on the ordinary shares for the nine months ended 30 September 2017 in the amount of RUB 10.00 per share.

On 9 June 2018 the annual general shareholders' meeting of PJSC Gazprom Neft approved a dividend on the ordinary shares for 2017 in the amount of RUB 15.00 per share including an interim dividend on the ordinary shares in the amount of RUB 10.00 per share.

 

13.       Other current liabilities

Other current liabilities as of 30 June 2018 and 31 December 2017 comprise the following:


30 June 2018

31 December 2017

Advances received

26,769

21,972

Payables to employees

3,835

3,182

Other non-financial payables

8,641

7,346

Total other current liabilities

39,245

32,500

 

 

14.       Other taxes payable

Other taxes payable as of 30 June 2018 and 31 December 2017 comprise the following:


30 June 2018

31 December 2017

VAT

45,774

27,515

Mineral extraction tax

39,871

31,807

Excise tax

13,014

13,201

Social security contributions

4,854

6,974

Other taxes

5,902

5,336

Total other taxes payable

109,415

84,833

 

Tax expense other than income tax expense for the three and six months ended 30 June 2018 and 2017 comprise the following:


3 months ended

30 June 2018

3 months ended

30 June 2017

6 months ended

30 June 2018

6 months ended

30 June 2017

Mineral extraction tax

122,310

70,606

219,487

151,388

Excise tax

34,121

32,954

68,511

58,391

Social security contributions

5,449

4,761

11,199

9,860

Other taxes

4,153

3,323

7,911

6,392

Total taxes other than income tax

166,033

111,644

307,108

226,031

 

15.       Long-term debt

As of 30 June 2018 and 31 December 2017 the Group has long-term outstanding debt as follows:


30 June 2018

31 December 2017

Bank loans

344,142

303,173

Loan participation notes

189,110

226,110

Bonds

132,661

143,007

Other borrowings

7,933

7,724

Less current portion of long-term debt

(67,636)

(131,360)

Total long-term debt

606,210

548,654

 

Bank loans

In March 2018 the Group performed principal repayment in the total amount of USD 307.1 million (RUB 17.5 billion) under the Club term loan facility with the syndicate of international banks (facility agent - Mizuho) according to the payment schedule.

In March 2018 the Group performed principal repayment in the total amount of USD 100 million (RUB 5.8 billion) under the Club term loan facility with the syndicate of international banks (facility agent - Commerzbank) according to the payment schedule.

In January 2018 the Group borrowed RUB 51.3 billion under long-term facility agreements due payable in January 2023.

In June 2018 the Group borrowed RUB 102.0 billion under long-term facility agreements due payable in August 2023.

In December 2017 the Group signed several long-term facility agreements with final maturity date in December 2022 - June 2023. In June 2018 the Group performed pre-scheduled principal repayment in the total amount of RUB 102.0 billion.

The loan agreements contain financial covenant that limits the Group's ratio of "Consolidated financial indebtedness to Consolidated EBITDA". The Group is in compliance with all covenants as of 30 June 2018 and 31 December 2017 and during the six months ended 30 June 2018.

Bonds

In March 2018 the Group placed six-year Rouble Bonds (001P-06R series) with the total par value of RUB 25.0 billion. The bonds bear interest of 7.2% per annum.

In March 2018 the Group exercised the call option on Rouble bonds (series BO-02 and BO-07) in the total amount of RUB 25.0 billion. The bonds are fully repaid.

In April 2018 the Group exercised the put option on Rouble bonds (series 4-04) in the total amount of RUB 9.9 billion.

Loan participation notes

In April 2013 the Group raised EUR 750 million (RUB 30.6 billion) financed by 2.9% Loan Participation Notes (LPN) due payable in April 2018 (Series 2). In April 2018 the Group performed principal repayment of LPN (series 2) in the total amount of EUR 750 million (RUB 56.6 billion). The LPN are fully repaid.

16.       Finance lease

Since 2017 the Group has finance lease agreements regarding vessels. As of 30 June 2018 net book value of the leased assets which are pledge for finance lease is RUB 24.7 billion (RUB 24.8 billion as of 31 December 2017). At the end of lease term ownership title to the vessels transfers to the Group. The lease contract also contains an option for early purchase of the assets by the Group.

Net book value of other items of property, plant and equipment under finance lease contracts is non significant.

The reconciliation between future minimum lease payments and their present value as of 30 June 2018 and 31 December 2017 is presented in the table below:


Minimum lease payments

Present value of minimum lease payments

30 June 2018



 Less than one year

3,034

2,934

 Between one and five years

12,388

10,281

 More than five years

17,416

10,449

Total minimum lease payments

32,838

23,664

31 December 2017



 Less than one year

2,784

2,693

 Between one and five years

11,204

9,273

 More than five years

17,355

10,257

Total minimum lease payments

31,343

22,223

 

The difference between the minimum lease payments and their present value represents future finance charges on finance lease liabilities.

 

17.       Other non-current financial liabilities

Other non-current financial liabilities as of 30 June 2018 and 31 December 2017 comprise the following:


30 June 2018

31 December 2017

Deferred consideration

36,605

47,245

Forward contracts - cash flow hedge

1,484

1,295

Other liabilities

9

29

Total other non-current financial liabilities

38,098

48,569

 

Deferred consideration represents liability to PJSC Gazprom for assets relating to Prirazlomnoe project. Payments of the principal amount of the liability are presented as financing activities at line "Repayment of long-term borrowings" in Interim Condensed Consolidated Statement of Cash Flows.

 

18.       Net foreign exchange loss / gain

Net foreign exchange loss / gain for the three and six months ended 30 June 2018 and 2017 comprise the following:


3 months ended

30 June 2018

3 months ended

30 June 2017

6 months ended

30 June 2018

6 months ended

30 June 2017

Net foreign exchange (loss) / gain on financing activities, including:

(37,526)

(17,532)

(41,344)

9,572

foreign exchange gain

2,446

419

4,026

10,327

foreign exchange loss

(39,972)

(17,951)

(45,370)

(755)

Net foreign exchange gain / (loss) on operating activities

17,587

10,055

17,027

(3,867)

Net foreign exchange (loss) / gain

(19,939)

(7,477)

(24,317)

5,705

 

 

19.       Finance expense

Finance expense for the three and 30 June 2018 and 2017 comprise the following:


3 months ended

30 June 2018

3 months ended

30 June 2017

6 months ended

30 June 2018

6 months ended

30 June 2017

Interest expense

12,307

12,051

24,529

23,524

Decommissioning provision: unwinding of discount

743

580

1,478

1,305

Less: capitalised interest

(7,585)

(6,088)

(14,597)

(11,568)

Finance expense

5,465

6,543

11,410

13,261

 

 

20.       Fair value measurement

The following assets and liabilities are measured at fair value in the Interim Condensed Consolidated Financial Statements: derivative financial instruments, equity investments and Stock Appreciation Rights plan (SARs). Derivative financial instruments and SARs refer to Level 2 of the fair value measurement hierarchy, i.e. their fair value is determined on the basis of inputs that are observable for the asset or liability either directly or indirectly. The fair value of the foreign exchange contracts is determined by using forward exchange rates at the reporting date with the resulting value discounted back to present value. The fair value of the liability under the SAR plan is estimated using the Black-Scholes-Merton option-pricing model by reference primarily to the Company's share price, historic volatility in the share price, dividend yield and interest rates for periods comparable to the remaining life of the award. There were no transfers between the levels of the fair value hierarchy during the interim period. There are no significant assets or liabilities measured at fair value categorised within Level 1 or Level 3 of the fair value hierarchy.

As of 30 June 2018 the fair value of bonds and loan participation notes is RUB 321,813 million (RUB 378,085 million as of 31 December 2017). The fair value is derived from quotations in active market and related to Level 1 of the fair value hierarchy. Carrying value of other financial liabilities approximates their fair value.

 

21.       Commitments and contingencies

Taxes

Russian tax and customs legislation is subject to frequent changes and varying interpretations. Management's treatment of such legislation as applied to the transactions and activity of the Group, including calculation of taxes payable to federal, regional and municipal budgets, may be challenged by the relevant authorities. The Russian tax authorities may take a more assertive position in their treatment of legislation and assessments, and there is a risk that transactions and activities that have not been challenged in the past may be challenged later. As a result, additional taxes, penalties and interest may be accrued. Generally, taxpayers are subject to tax audits for a period of three calendar years immediately preceding the year in which the decision to carry out a tax audit has been taken. Under certain circumstances tax audits may cover longer periods. The years 2015 - 2017 are currently open for tax audit. Management believes it has adequately provided for any probable additional tax accruals that might arise from these tax audits.

The Russian transfer pricing legislation is generally aligned with the international transfer pricing principles developed by the Organisation for Economic Cooperation and Development (OECD), although it has specific features. This legislation provides for the possibility of additional tax assessments for controlled transactions (transactions between related parties and certain transactions between unrelated parties) if such transactions are not on an arm's-length basis.

The compliance of the prices of the Group's controllable transactions with related parties with the transfer pricing rules is subject to regular internal control. Management believes that the transfer pricing documentation that the Group has prepared to confirm its compliance with the transfer pricing rules provides sufficient evidence to support the Group's tax positions and related tax returns. In addition in order to mitigate potential risks, the Group regularly negotiates approaches to defining prices used for tax purposes for major controllable transactions with tax authorities in advance. Nineteen pricing agreements between the Group and tax authorities regarding major intercompany transactions have been concluded in 2012-2018.

As Russian tax legislation does not provide definitive guidance in certain areas, the Group adopts, from time to time, interpretations of such uncertain areas that reduce the overall tax rate of the Group. While Management currently estimates that the tax positions and interpretations that it has taken can probably be sustained, there is a possible risk that an outflow of resources will be required should such tax positions and interpretations be challenged by the tax authorities. The impact of any such challenge cannot be reliably estimated; however, it may be significant to the financial position and/or the overall operations of the Group.

Economic environment in the Russian Federation

The Russian Federation displays certain characteristics of an emerging market. Its economy is particularly sensitive to oil and gas prices. The legal, tax and regulatory frameworks continue to develop and are subject to frequent changes and varying interpretations. The Russian economy was growing in 2017 and 2018, after overcoming the economic recession of 2015 and 2016. The economy is negatively impacted by volatility of oil prices, ongoing political tension in the region and international sanctions against certain Russian companies and individuals. The financial markets continue to be volatile. This operating environment has a significant impact on the Group's operations and financial position. Management is taking necessary measures to ensure sustainability of the Group's operations. However, the future effects of the current economic situation are difficult to predict and management's current expectations and estimates could differ from actual results.

In 2014 the U.S., the EU and certain other countries imposed sanctions on the Russian energy sector that partially apply to the Group. The information on the main restrictions related to sanctions was disclosed in the Consolidated Financial Statements as of and for the year ended 31 December 2014. In August 2017 the U.S. signed an act to impose further sanctions against the Russian Federation, North Korea and Iran. The Group assessed that the new sanctions don't have significant impact on its activity.

Environmental matters

The enforcement of environmental regulation in the Russian Federation is evolving and the enforcement posture of government authorities is continually being reconsidered. The Group periodically evaluates its potential obligations under environmental regulation. Management is of the opinion that the Group has met the government's requirements concerning environmental matters, and therefore the Group does not have any material environmental liabilities.

Capital commitments

As of 30 June 2018 the Group has entered into contracts to purchase property, plant and equipment for RUB 364,255 million (RUB 328,697 million as of 31 December 2017).


22.       Related party transactions

For the purpose of these Interim Condensed Consolidated Financial Statements parties are considered to be related if one party has the ability to control or jointly control the other party or exercise significant influence over the other party in making financial and operational decisions as defined by IAS 24 - Related Party Disclosures. Related parties may enter into transactions which unrelated parties might not, and transactions between related parties may not be effected on the same terms, conditions and amounts as transactions between unrelated parties.

The Group has applied the exemption as allowed by IAS 24 not to disclose all government related transactions, as the parent of the Company is effectively being controlled by the Russian Government. In the course of its ordinary business the Group enters into transactions with natural monopolies, transportation companies and other government-related entities. Such purchases and sales are individually insignificant and are generally entered into on market or regulated prices. Transactions with the state also include taxes which are detailed in Notes 6 and 14. The Group also leases vessels under time-charter agreements with a government related entity (lease expense amounted RUB 2.7 billion and RUB 2.6 billion for the six months ended 30 June 2018 and 2017, respectively). The tables below summarise transactions in the ordinary course of business with either the parent company or parent's subsidiaries and associates or associates and joint ventures of the Group.

The Group enters into transactions with related parties based on market or regulated prices. Short-term and long-term loans provided as well as debt are based on market conditions available for not related entities.

As of 30 June 2018 and 31 December 2017 the outstanding balances with related parties were as follows:

30 June 2018

Parent company

Parent's subsidiaries and associates

Associates and joint ventures

Cash and cash equivalents

-

32,853

-

Short-term financial assets

-

-

3,884

Trade and other receivables

5,466

3,652

9,675

Other current assets

11

3,544

633

Long-term financial assets

-

-

6,103

Other non-current assets

-

307

-

        Total assets

5,477

40,356

20,295

Short-term debt and other current financial

liability

-

-

892

Trade and other payables

36,048

2,365

50,292

Other current liabilities

161

225

91

Long-term debt and other non-current financial

liability

36,816

62,757

-

Other non-current liabilities

9,764

-

-

        Total liabilities

82,789

65,347

51,275

 

 

31 December 2017

Parent company

Parent's subsidiaries and associates

Associates and joint ventures

Cash and cash equivalents

-

27,201

-

Short-term financial assets

-

1,322

3,776

Trade and other receivables

4,567

4,172

9,813

Other current assets

23

2,708

783

Long-term financial assets

-

-

27,673

Other non-current assets

-

309

-

        Total assets

4,590

35,712

42,045

Short-term debt and other current financial

liability

-

-

367

Trade and other payables

52,970

2,257

38,173

Other current liabilities

130

318

137

Long-term debt and other non-current financial

liability

47,480

57,600

-

Other non-current liabilities

6,394

-

-

        Total liabilities

106,974

60,175

38,677

 

For the six months ended 30 June 2018 and 2017 the following transactions occurred with related parties:

6 months ended

30 June 2018

Parent company

Parent's subsidiaries and associates

Associates and joint ventures

Crude oil, gas and petroleum products sales

24,293

23,352

31,317

Other revenue

82

1,973

3,617

Purchases of crude oil, gas and petroleum products

-

23,065

96,766

Production related services

9

12,918

11,373

Transportation costs

4,493

981

4,301

Interest expense

2,675

1,160

22

Interest income

-

236

768

 

 

6 months ended

30 June 2017

Parent company

Parent's subsidiaries and associates

Associates and joint ventures

Crude oil, gas and petroleum products sales

17,000

18,833

27,547

Other revenue

2

2,472

5,860

Purchases of crude oil, gas and petroleum products

-

21,502

61,185

Production related services

12

11,341

9,775

Transportation costs

4,706

728

5,061

Interest  expense

2,732

1,690

27

Interest income

-

86

3,782

 

Transactions with Key Management Personnel

For the six months ended 30 June 2018 the Group recognised RUB 1,384 million as compensation for key management personnel (members of the Board of Directors and Management Committee). Comparative data for the six months ended 30 June 2017 are disclosed in Interim Condensed Consolidated Financial Statements as of and for the three and six months ended 30 June 2017. Key management remuneration includes salaries, bonuses, quarterly accruals of SAR and other contributions.

 

23.       Segment information

Operating segments are components that engage in business activities that may earn revenues or incur expenses, whose operating results are regularly reviewed by the chief operating decision maker (CODM), and for which discrete financial information is available.

The Group manages its operations in 2 operating segments: Upstream and Downstream.

Upstream segment (exploration and production) includes the following Group operations: exploration, development, production and sale of crude oil and natural gas (including joint ventures results), oil field services. Downstream segment (refining and marketing) processes crude into refined products and purchases, sells and transports crude oil and refined petroleum products.

The information about the Group's operating segments for the six months ended 30 June 2018 and 2017 is presented below:

6 months ended 30 June 2018

Upstream

Downstream

Eliminations

Total

Revenue from sales:





                 External customers

25,672

1,112,064

-

1,137,736

                 Inter-segment

523,506

9,630

(533,136)

-

Total revenue from sales

549,178

1,121,694

(533,136)

1,137,736






Adjusted EBITDA

321,194

47,006

-

368,200

Depreciation, depletion and amortisation

61,487

18,362

-

79,849

Capital expenditure

87,203

75,552

-

162,755

 

 

6 months ended 30 June 2017

Upstream

Downstream

Eliminations

Total

Revenue from sales:





                 External customers

106,394

807,938

-

914,332

                 Inter-segment

254,150

9,542

(263,692)

-

Total revenue from sales

360,544

817,480

(263,692)

914,332






Adjusted EBITDA

190,609

55,198

-

245,807

Depreciation, depletion and amortisation

50,505

15,789

-

66,294

Capital expenditure

94,150

60,085

-

154,235

 

Intersegment revenues are based upon prices effective for local markets and linked to market prices.

Eliminations and other adjustments section encompasses elimination of inter-segment sales and related unrealised profits, mainly from the sale of crude oil and petroleum products, and other adjustments.

Adjusted EBITDA represents the Group's EBITDA and its share in associates' and joint ventures' EBITDA. Management believes that adjusted EBITDA represents useful means of assessing the performance of the Group's ongoing operating activities, as it reflects the Group's earnings trends without showing the impact of certain charges. EBITDA is defined as earnings before interest, income tax expense, depreciation, depletion and amortisation, net foreign exchange gain (loss), other non-operating expenses and includes the Group's share of profit of associates and joint ventures. EBITDA is a supplemental non-IFRS financial measure used by Management to evaluate operations.

The geographical segmentation of the Group's revenue and capital expenditures for the six months ended 30 June 2018 and 2017 is presented below:

6 months ended 30 June 2018

Russian Federation

CIS

Export and international operations

Total

Sales of crude oil

42,749

19,331

274,209

336,289

Sales of petroleum products

481,020

42,481

226,876

750,377

Sales of gas

17,309

-

604

17,913

Other sales

25,661

1,135

6,361

33,157

Revenues from external customers, net

566,739

62,947

508,050

1,137,736

6 months ended 30 June 2017





Sales of crude oil

46,171

14,255

219,260

279,686

Sales of petroleum products

392,172

34,218

158,555

584,945

Sales of gas

18,059

-

707

18,766

Other sales

25,277

943

4,715

30,935

Revenues from external customers, net

481,679

49,416

383,237

914,332

 

For the six months ended 30 June 2018  and 2017 export sales of crude oil include sales from upstream segment in the amount of RUB 16,691 million and RUB 98,747 million, respectively. The remaining amount of RUB 257,518 million for six months ended 30 June 2018 (RUB 120,513 million for six months ended 30 June 2017) represents sales from downstream segment.


Russian Federation

CIS

Export and international operations

Total

Non-current assets as of 30 June 2018

2,281,488

12,015

336,892

2,630,395

Capital expenditures for the six months ended

30 June 2018

147,287

697

14,771

162,755

Non-current assets as of 31 December 2017

2,159,510

11,097

318,947

2,489,554

Capital expenditures for the six months ended

30 June 2017

144,793

327

9,115

154,235

 

Adjusted EBITDA for the three and six months ended 30 June 2018 and 2017 is reconciled below:


3 months ended

30 June 2018

3 months ended

30 June 2017

6 months ended

30 June 2018

6 months ended

30 June 2017

Profit for the period

102,994

53,317

177,139

118,051

Total income tax expense

20,510

13,240

35,165

28,162

Finance expense

5,465

6,543

11,410

13,261

Finance income

(1,082)

(2,713)

(2,930)

(5,226)

Depreciation, depletion and amortisation

42,340

33,984

79,849

66,294

Net foreign exchange (loss) / gain

19,939

7,477

24,317

(5,705)

Other loss, net

2,964

2,513

5,629

3,379

EBITDA

193,130

114,361

330,579

218,216

less share of profit of associates and joint ventures

(25,589)

(7,892)

(40,357)

(18,710)

add share of EBITDA of associates and joint ventures

44,862

21,544

77,978

46,301

Total adjusted EBITDA

212,403

128,013

368,200

245,807


The company's address for correspondence is:

3-5 Pochtamtskaya St,

St Petersburg, Russian Federation

190000

 

Ul. Pochtamtskaya, 3-5

Saint Petersburg

190000, Russian Federation

Telephone: +7 (812) 363 3152

Hotline: 8 800 700 3152

Fax: +7 (812) 363 3151

www.gazprom-neft.ru

 

Investor Relations

Tel.: +7 (812) 385 9548

Email: [email protected]

 


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