Rosneft · RUS:ROSN
Rosneft — Rosneft Oil Company — Q1 2019 Earnings Presentation
25 slides from Rosneft's earnings presentation, May 13, 2019
Slide 1: Rosneft Oil Company IFRS Results Q1 2019
Rosneft Oil Company IFRS Results Q1 2019 May 13, 2019
Slide 2: Important Notice
Important Notice Information herein has been prepared by the Company. The presented conclusions are based on the general information collected as of the date hereof and can be amended without any additional notice. The Company relies on the information obtained from the sources which it deems credib
Slide 3: Navigating OPEC+ Environment
Navigating OPEC+ Environment Crude oil and condensate production in Russia Brent price 5.0 11.6 90 6 total Russia (RHS) mmbpd $/bbl ‘000 Rub/bbl Rub Rosneft (LHS) $ entry level for the production cut by the Company 4.8 11.2 75 5 4.70 4.60 4.6 10.8 60 4 4.4 10.4 45 3 4.2 10.0 30 2 Oct-16 Jan-17 Apr-1
Slide 4: Production Dynamics
Production Dynamics Hydrocarbon production Q1 2019 vs Q1 2018 kboed (12) 56 31 34 36 Robust development of major greenfields 49 (Kondinskoe, Srednebotuobinskoe, Yurubcheno-Tokhomskoe) Strong operating performance at Yugansk and a production ramp up at other brownfields (Samara, RN-Nyagan, 5,902
Slide 5: Refining Efficiency Optimization
Refining Efficiency Optimization Crude oil processing Q1 2019 results outside Russia mmt Reducing capacity utilization following a decrease in in Russia the current demand for petroleum products 2.7 Maintenance and recovery works at German refineries 2.9 2.4 In March 2019 commercial production
Slide 6: Focus on High-margin Distribution Channels
Focus on High-margin Distribution Channels Netbacks for the main crude oil marketing channels Crude oil marketing breakdown Нетбэк Export,экспорта Asia в направлении Азии Нетбэк Export,экспорта West в направлении Европы mmt Refining Нетбэк in Russia переработка Нетбэк вн.рынок Domestic market 55.4 6
Slide 7: Efficient Control over the Costs
Efficient Control over the Costs Lifting costs Refining costs in Russia Rub/boe Quarter 12M average % YoY Rub/bbl Quarter 12M average % YoY 196 188 215 205 195 183 185 193 180 192 168 172 12.0% 10.1% 8.9% 3.8% 5.4% 2.1% 3.0% 0.6% 0.0% -4.4% Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19
Slide 8: Earnings Recovery
Earnings Recovery EBITDA Q1 2019 vs Q4 2018 Rub bn 14 (11) (1) 4 (1) 33 (4) (9) (5) 13 (9) 77 (40) (1) 548 488 Internal and seasonal factors : External factors : Rub +39 bn; +8.0% Rub +21 bn; +4.3% Q4 2018 Exchange rate Completion of the Crude price Share in profits of Export duty lag Other taxes Nu
Slide 9: Focused on Value and Growth
Focused on Value and Growth CAPEX Rub bn Q1 2019 CAPEX was Rub 214 bn, nearly unchanged YoY (-4%) Rosneft CAPEX program priorities: 922 936 maintaining stable production at brownfields through successful drilling and wellworks while preserving high investment efficiency execution of new highly
Slide 10: Sustainable Free Cash Flow Generation
Sustainable Free Cash Flow Generation Free cash flow (LTM) Rub bn 1,133 1,188 916 The Company’s free cash flow exceeded $18 bn for the last 12 month 422 286 Rosneft is one of the leaders globally in terms of free cash flow generation Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Free cash flow calculation
Slide 11: Financial Stability
Financial Stability Debt evolution Reimbursement of prepayments received $ bn Cash, cash equivalents and other liquid financial assets $ bn Reclassification Net debt IFRS 16 effect Principal amount Net debt/EBITDA 2.1 1.7 +2,0 1.5 1.4 1.3 1.1 1.2 71.9 69.7 59.7 63.2 15.5 57.6 59.4 19.6 16.7 44.8 22.
Slide 12: Appendix
Appendix
Slide 13: Key Operational Highlights
Key Operational Highlights Indicator Q1 2019 Q4 2018 % Q1 2019 Q1 2018 % Hydrocarbon production, incl. 5,902 5,938 (0.6)% 5,902 5,708 3.4% kboed Oil and liquids 4,744 4,792 (1.0)% 4,744 4,566 3.9% kbpd Gas 1,158 1,146 1,158 1,142 1.0% 1.4% kboed Oil refining 26.87 29.53 (9.0)% 26.87 27.57 (2.5)% mmt
Slide 14: Key Financial Highlights
Key Financial Highlights Indicator Q1’19 Q4’18 % Q1’19 Q1’18 % EBITDA, Rub bn 548 488 12.3% 548 385 42.3% Net Income, Rub bn 131 109 20.2% 131 81 61.7% attributable to Rosneft shareholders Adjusted net income1, Rub bn 242 185 30.9% 242 123 96.1% attributable to Rosneft shareholders Adjusted operatin
Slide 15: Responsible Business is the Company’s Core Value
Responsible Business is the Company’s Core Value «Rosneft-2022» Strategy: enter the The Energy Saving Innovative «Rosneft-2022» The social sphere UN Global Compact first quartile of Program in force Development Strategy: investments Participant international oil and since 2009 Program, 2018 incremen
Slide 16: Improving Rosneft’s Investment Case through Effective ESG Communications
Improving Rosneft’s Investment Case through Effective ESG Communications On December 20, 2018 the Board of Directors approved Rosneft strategy related to commitment to the 17 Sustainable Development Goals of the United Nations1 Rosneft has determined five goals of strategic priority, directly suppor
Slide 17: Projects Launched in 2016–2017
Projects Launched in 2016–2017 Indicator Suzun E. Messoyakha2 Location Krasnoyarsk Territory Yamal-Nenets Autonomous District 3Р PRMS reserves1 82 mmtoe / 623 mmboe 248 mmtoe / 1,707 mmboe Commissioning year 2016 2016 Production in 2018 / Q1 2019 4.1 / 0.6 mmt 4.5 / 1.2 mmt Oil production plateau ~4
Slide 18: Projects Launched in 2018
Projects Launched in 2018 Indicator Tagul field Taas-Yuryakh (Srednebotuobinskoye field, Phase 2) Location Krasnoyarsk Territory The Sakha Yakutia Republic 3Р PRMS reserves1 456 mmtoe/ 3,251 mmboe 281 mmtoe/ 2,053 mmboe Commissioning year Q4 2018 Q4 2018 Production in 2018 / Q1 2019 1.3 / 0.3 mmt 2.
Slide 19: Progress on a Key Project: Rospan
Progress on a Key Project: Rospan Major driver of the Company near-term production growth Indicator Value 891 bcm of gas, 207 mmt of gas 3Р reserves (PRMS) condensate, LPG and oil 6.63 bcm of gas 2018 production 1.39 mmt of liquids Potential: > 21 bcm of gas Annual production > 5 mmt of liquids up t
Slide 20: Gas Greenfield Development: Kharampur
Gas Greenfield Development: Kharampur The most significant (after Rospan) project in terms of gas production growth1 Indicator Value 3Р reserves (PRMS), gas 650 bcm2 Gas production plateau: Phase 1 c. 11 bcmpa3 (Senomanian) Commissioning year 2020 Current status and Q1 2019 results: FEED is at the
Slide 21: Calculation of Adjusted OCF
Calculation of Adjusted OCF Profit and Loss Statement Cash Flow Statement Q1 2019, Q1 2019, № Indicator Indicator № $ bn $ bn 2.3 Net income 1 1 Revenue, incl. 31.9 Adjustments to reconcile net income to 3.6 2 Reimbursement of prepayments and cash flow from operations, incl. 2.5 other financial obli
Slide 22: Finance Expenses, Rub bn
Finance Expenses, Rub bn Indicator Q1 2019 Q4 2018 % Q1 2019 Q1 2018 % 1. Interest accrued1 74 73 1.4% 74 65 13.8% 2. Interest paid2 73 82 (11.0)% 73 61 19.7% 3. Change in interest payable (1-2) 1 (9) – 1 4 (75.0)% 4. Interest capitalized3 41 39 5.1% 41 33 24.2% Net loss from operations with financi
Slide 23: Marginal Effect from IFRS 16 Leases Implementation
Marginal Effect from IFRS 16 Leases Implementation Starting January 1, 2019 the new accounting standard IFRS 16 Leases came into effect. According to the standard operating leases previously taken to the profit and loss statement should be put onto the balance sheet similar to the financial leases T
Slide 24: Sensitivity Analysis
Sensitivity Analysis Q1 2019 EBITDA and net income sensitivity to Q1 2019 EBITDA and net income sensitivity to +/- 10% change in Urals price +/- 10% change in Rub/$ exchange rate Rub bn Rub bn EBITDA EBITDA (83) 83 (93) 93 Net income Net income (67) 67 (75) 75 -10% 63.2 +10% -10% 66.1 +10% $/bbl Rub
Slide 25: Q&A
Q&A