Rosneft · RUS:ROSN
Rosneft — FY2021 Earnings Presentation
38 slides from Rosneft's earnings presentation, Feb 11, 2022
Slide 1: IFRS Results Q4 and 12M 2021
IFRS RESULTS Q4 AND 12M 2021 February 11, 2022 1
Slide 2: Important Notice
IMPORTANT NOTICE Information herein has been prepared by the Company. The presented This presentation does not constitute an offer to sell, or any solicitation of conclusions are based on the general information collected as of the date any offer to subscribe for or purchase any securities. It is un
Slide 3: Key Financial Indicators
KEY FINANCIAL INDICATORS 883 Rub bn Record-high 2021 Net Income 1,044 Rub bn 2021 Free Cash Flow (a 2.5x growth YoY) -5.5 $ bn Reduction of net financial debt and trading liabilities YTD 3
Slide 4: Key Events
KEY EVENTS Rosneft Board of Directors approved a new strategy ‘Rosneft-2030: Reliable Energy and Global Energy Transition’ A new unique gas condensate field was discovered in the Taimyr Peninsula with 384 bcm of gas reserves Comprehensive engineering surveys have been completed and constructio
Slide 5: New 'Rosneft-2030' Strategy
NEW ‘ROSNEFT-2030’ STRATEGY Expected FCF growth by 2030 Carbon Footprint ‘Net Zero’ Reduction on GHG emissions by 20501 330 mmtoepa of hydrocarbons production Operational by 2030 >2х Leadership growth Maintain leadership in unit production costs 69% light products yield Efficiency at Russian refiner
Slide 6: Carbon Footprint Reduction Targets
CARBON FOOTPRINT REDUCTION TARGETS GHG emissions reduction1 Gas Flaring >25% by 2035 0 by 2030 Scope 1 and 2 emissions Zero routine flaring of APG and by 5% by 2025 at target level set by the World Bank and OGCI Net Zero by 2050 (Scope 1 and 2) GHG intensity Methane1 <20 kg СО2-e/boe by 2030 or earl
Slide 7: ESG Events
ESG EVENTS Environmental: In 2021, Rosneft released more than 117 mln fringerlings, bred in fish farms, into Russia’s river systems as part of a program to preserve biodiversity and replenish aquatic bioresources Social: The Company reduced the number of process safety events (PSE). In 2021, the
Slide 8: Company Achievements in ESG
COMPANY ACHIEVEMENTS IN ESG Rosneft remains a constituent The global leader – ahead The climate change rating The best Russian oil and gas of the international FTSE4Good of the major O&G companies increased to B Company in the rating Index Series The rating is 69.71 with strong ESG performance CSA1
Slide 9: Crude Oil Demand and Supply
CRUDE OIL DEMAND AND SUPPLY mmbpd 110 Crude oil production Crude oil consumption 100 90 80 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 '20 '20 '20 '20 '21 '21 '21 '21 '22 '22 '22 '22 '23 '23 '23 '23 9 Source: Bloomberg data, EIA outlook
Slide 10: Brent Prices
BRENT PRICES $/bbl 100 Actual Forecast Range 80 60 40 20 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 '19 '20 '20 '20 '20 '21 '21 '21 '21 '22 '22 '22 '22 '23 '23 10 Source: Bloomberg data
Slide 11: Gross Upstream Margin
GROSS UPSTREAM MARGIN1 Monthly average 20 ‘000 Rub/t FY average 16 12 8 4 0 Mar May Mar May Mar May Jan Feb Dec Dec Dec Aug Jan Feb Aug Jan Feb Aug Jan Sep Nov Sep Nov Sep Nov Jun Jun Jun Apr Jul Oct Apr Jul Oct Apr Jul Oct 2019 2020 2021 2022 11 Note: (1) Calculated as Urals price less export custo
Slide 12: Operating Results
OPERATING RESULTS 12
Slide 13: Key Operating Indicators
KEY OPERATING INDICATORS Hydrocarbon 1,109 1,121 production, 946 * 1,080 kboepd Liquids 3,847 * 3,905 3,979 3,989 Gas 10.97 11.00 Crude oil processing, mmt 93.01 95.13 In Russia 2.95 2.90 Abroad 24.14 23.43 2020 2021 Q3'21 Q4'21 * Excluding ‘low-margin’ assets disposed in 2020. For assets included i
Slide 14: Efficient Reserve Replacement
EFFICIENT RESERVE REPLACEMENT Proven reserves reconciliation1, bn boe 2 fields and 256 new deposits with total AB1C1+B2C2 reserves of about 0.5 bn toe were discovered 0.9 0.6 1.8 1.2 The largest global discovery in 2021: field named after. E. Zinichev2 with 384 bcm of AB1C1+B2C2 recoverable gas
Slide 15: Navigating OPEC+ Environment
NAVIGATING OPEC+ ENVIRONMENT Russian crude oil production cuts under Rosneft liquids production the OPEC+ Agreement1 5,000 ‘Low-margin’ assets production 2020 2021 kbpd May May Nov Nov Aug Aug Mar Dec Dec Sep Sep Feb Apr Oct Oct Jun Jun Jan Jan Jul Jul 0 4,000 0,3% -1,000 2% 4% 3,000 ~1% -2,000 +500
Slide 16: Vostok Oil
VOSTOK OIL In the Zapadno-Irkinskiy LA, 500 sq. km of 3D seismic work were conducted, 3 exploration wells with a 100% success rate were completed at the project, construction of another 8 wells is underway Design and survey works were completed for the facilities of the ‘Sever Bay Port’ terminal
Slide 17: Gas Business
GAS BUSINESS Gas production, bcm 64.75 +14% 56.86 27.99 27.11 16.76 16.94 36.76 6.79 7.77 29.75 9.97 9.17 Positive dynamics was due to an increase in natural gas production at Q3 '21 Q4 '21 2020* 2021 the Rospan project, an increase in sales of gas produced at the Zohr Associated petroleum gas Nat
Slide 18: Gas Business
GAS BUSINESS At the Rospan project, commissioning work is being completed at the second start-up complex, preparations are underway for its launch, which will ensure a further production increase and reaching the planned production level At the Kharampur field, work is being carried out in accor
Slide 19: Oil Refining
OIL REFINING Refining margins1, $/t Key product prices less cost of Product output, mmt feedstock, Russian refineries1, $/t 64.8 400 40 28.0 25.1 25.7 26.3 45.2 24.8 25.7 25.6 300 30 40.1 23.5 29.4 29.9 200 20 14.0 12.4 100 10 5.5 6.5 0.5 10.4 0 0 - 11.1 - 20.8 - 17.6 - 24.8 -100 -10 - 29.1 -200 -20
Slide 20: Focus on Distribution Channels Development
FOCUS ON DISTRIBUTION CHANNELS DEVELOPMENT Netbacks of the main crude oil marketing channels, Crude oil marketing breakdown, $/t mmt 213.6 212.2 53.9 56.4 Export, Asia Export, Europe Export, West 22% 22% 22% 24% Netback, refining Netback, domestic market 500 26% 25% 450 Export, Asia 29% 27% 400 3% 3
Slide 21: Premium Marketing Channels
PREMIUM MARKETING CHANNELS Avia Bunker fuel Lubes Bitumen In 2021, the network of presence at The bunker fuel business is presented in In 2021, LLC RN-Lubricants was an In 2021, the volume of bituminous the airports of Turkey, Cyprus, China, all the key seaports of Russia - the Far official supplier
Slide 22: Development of the Retail Channel
DEVELOPMENT OF THE RETAIL CHANNEL +11% retail sales volume 16.9 mln loyalty program participants, incl. +19% non-fuel sales gross revenue 3.1 mln virtual loyalty cards holders Key achievements Implemented activities In 2021, the retail sales volume at the filling stations exceeded the level of
Slide 23: Financial Results
FINANCIAL RESULTS 23
Slide 24: EBITDA and Net Income Dynamics
EBITDA AND NET INCOME DYNAMICS EBITDA Q4 2021 vs. Q3 2021, Rub bn 11 (14) 3 14 24 676 638 Q3 2021 Crude oil price (Rub) Damper effect Other taxes Income from associates and JVs Other Q4 2021 Net Income Q4 2021 vs. Q3 2021, Rub bn 44 (12) 31 (106) 1 (36) 49 314 345 236 187 Net Income attr. to Minorit
Slide 25: Costs Dynamics
COSTS DYNAMICS ‘Controlled’ costs, Rub bn Maintaining unit lifting costs at a minimum level of $2.7 per boe (-3.6% YoY) 48 33 43 33 Flat general and administrative costs QoQ 29 33 40 86 17 76 74 60 64 66 Increased Downstream OPEX amid seasonal planned 56 62 maintenance cost growth in Q4 2021 9
Slide 26: CAPEX
CAPEX 2021 CAPEX was attributed to the recovery of investment activity amid a favorable macroeconomic environment and Rub bn was aimed at ensuring the implementation of the production program of the Company, including Vostok Oil, Yuganskneftegaz and Samotlorneftegaz >90% of investment program ac
Slide 27: Efficient Debt Management
EFFICIENT DEBT MANAGEMENT Liquidity position Financial debt breakdown Low share of the short-term as of December 31, 2021, $ bn as of December 31, 2021 financial debt 32.8 44% 30% Rubles Foreign currencies 78% 79% 83% 81% 47% Floating rates 12.2 53% Fixed rates 56% 70% 22% 21% 17% 19% Short-term fin
Slide 28: Appendix
APPENDIX 28
Slide 29: Key Operational Highlights
KEY OPERATIONAL HIGHLIGHTS INDICATOR, RUB BN Q4 ‘21 Q3 ‘21 % 12М ‘21 12М ‘20 % Hydrocarbon production, incl. 5,110 5,088 0.4% 4,985 5,186 (3.9)% kboed Liquids 3,989 3,979 0.3% 3,905 4,141 (5.7)% kbpd Gas 1,121 1,109 1.0% 1,080 1,045 3.3% kboed Oil refining 26.33 27.09 (2.8)% 106.13 103.98 2.1% mmt P
Slide 30: Key Financial Highlights
KEY FINANCIAL HIGHLIGHTS INDICATOR, RUB BN Q4 ‘21 Q3 ‘21 % 12М ‘21 12М ‘20 % EBITDA, Rub bn 676 638 6.0% 2,330 1,209 92.7% Net Income, Rub bn 187 314 (40.4)% 883 1321 >100% attributable to Rosneft shareholders Adjusted net income1, Rub bn 279 334 (16.5)% 1,057 168 >100% Adjusted operating cashflow2,
Slide 31: EBITDA and Net Income Dynamics
EBITDA AND NET INCOME DYNAMICS EBITDA 12M 2021 vs. 12M 2020, Rub bn (32) (8) (18) 330 (256) 107 36 1 961 2,330 1,209 12M 2020 Crude oil price (Rub) Tax maneuver New tax initiatives Profits of associates Damper effect Other taxes Number of days Transport tariffs Change in volumes 12M 2021 and JVs ind
Slide 32: Export Duty Lag
EXPORT DUTY LAG 12M 2021, Rub bn Q4 2021, Rub bn +74 +10 2,256 2,330 666 676 EBITDA (norm.) EBITDA (act.) EBITDA (norm.) EBITDA (act.) 32
Slide 33: Operating Cash Flow Calculation
OPERATING CASH FLOW CALCULATION Profit and Loss Statement Cash Flow Statement 12М ‘21, 12М ‘21, № INDICATOR INDICATOR № $ BN $ BN 13.7 Net income 1 1 Revenue, incl. 121.1 Adjustments to reconcile net income to cash flow from 7.3 2 Reimbursement of prepayments and other operations, incl. 9.1 financia
Slide 34: Operating Cash Flow Calculation
OPERATING CASH FLOW CALCULATION Rub bn (50) (88) (238) (5) 144 2,330 2,093 EBITDA Working capital Share in (profits)/losses of Income tax payments Interest and dividends Other Adj. operating cash flow 2021 associates and JVs received 2021 34
Slide 35: Free Cash Flow Calculation
FREE CASH FLOW CALCULATION Rub bn (12) 182 45 42 153 143 1,049 374 2,093 1,166 1,044 Net cash provided by Reimbursement of Reimbursement of FX rate Interest on Net change in Prepayments for Reimbursement of Adj. operating CAPEX Free cash flow operating activities prepayments received other financial
Slide 36: Finance Expenses
FINANCE EXPENSES INDICATOR, RUB BN Q4 ‘21 Q3 ‘21 % 12M ‘21 12M ‘20 % 1. Interest accrued1 79 74 6.8% 283 264 7.2% 2. Interest paid and offset2 74 67 10.4% 265 259 2.3% 3. Change in interest payable (1-2) 5 7 (28.6)% 18 5 >100% 4. Interest capitalized3 40 37 8.1% 142 131 8.4% 5. Net loss from operati
Slide 37: Variance Analysis
VARIANCE ANALYSIS 2021 EBITDA and net income sensitivity to +/-10% change in Urals price, Rub bn to +/-10% change in Rub/$ exchange rate, Rub bn EBITDA EBITDA -248 248 -315 315 Net Income Net Income -199 199 -271 271 68.6 73.7 -10% +10% -10% +10% $/bbl Rub/$ 37 Source: Company data
Slide 38: Thank You For Your Time!
ROSNEFT THANK YOU FOR YOUR TIME!