31.08.2016, 17:18
LUKOIL Announces Consolidated Financial Results for First Half 2016
OREANDA-NEWS. LUKOIL today published its interim consolidated financial statements for the three and six-month periods ended 30 June 2016, prepared in accordance with IFRS.
In the second quarter 2016, our sales revenues increased by 13.7% compared to the previous quarter, EBITDA remained practically unchanged and profit grew by 1.5 times. Such dynamics was primarily driven by higher average hydrocarbon prices, which was partially offset by lower compensation from the West Qurna-2 project, ruble appreciation to US dollar and euro, as well as decrease in refining margins, which was partially due to the increase in excise rates on refined products in Russia. Profit dynamics was substantially impacted by non-cash foreign exchange effect due to high volatility of exchange rates.
In the second quarter 2016, our free cash flow increased by 56.5% quarter-on-quarter and by 3.4 times compared to the second quarter 2015. As a result, our free cash flow for the first half 2016 increased to 93 bln RUB.
In the first half 2016, our financial results decreased year-on-year, which was mainly due to lower average hydrocarbon prices, increase in the oil extraction tax base rate, lower compensation from the West Qurna-2 project, as well as decline in refining margins. This was partially offset by positive effect of ruble depreciation to US dollar and euro. Among other positive factors were higher refinery throughput volumes, substantial improvement in the refined product slate, increase in sales via high margin channels and effective cost control.
Our EBITDA excluding West Qurna-2 increased by 7.1% quarter-on-quarter and remained practically unchanged compared to the first half 2015.
In the second quarter 2016, our capital expenditures decreased by 3.0% compared to the previous quarter, and in the first half 2016 the year-on-year decrease in capital expenditures amounted to 20.8%. The decrease was mainly driven by completion of the main refinery upgrade program in Russia, transition to production maintenance stage at the West Qurna-2 project, decrease in exploration drilling expenditures at our international offshore projects and general optimization measures. At the same time we increased investments into our strategic growth projects in Timan-Pechora and Caspian regions.
In the first half 2016, our hydrocarbon production was 411.1 mln boe (2.3 mln boe per day), which is 4.3% lower compared to the same period of 2015. The decline was mainly due to lower volumes of compensation crude oil from the Western Qurna-2 project, disposal of our share in Caspian Investment Resources Ltd in 2015, as well as natural production decline at our brownfields in Western Siberia.
In the first half 2016, production of refined products at our refineries increased by 5.3% year-on-year. We achieved substantial improvement of the product slate due to launching new facilities in 2015 and the first half 2016. Refining depth at our Russian refineries increased by 8 p.p. year-on-year to almost 86%. We also undertook measures on optimizing capacity utilization at our refineries in Russia, including via cross-supplies of vacuum gasoil, which resulted in additional efficiency gains.
In the second quarter 2016, our sales revenues increased by 13.7% compared to the previous quarter, EBITDA remained practically unchanged and profit grew by 1.5 times. Such dynamics was primarily driven by higher average hydrocarbon prices, which was partially offset by lower compensation from the West Qurna-2 project, ruble appreciation to US dollar and euro, as well as decrease in refining margins, which was partially due to the increase in excise rates on refined products in Russia. Profit dynamics was substantially impacted by non-cash foreign exchange effect due to high volatility of exchange rates.
In the second quarter 2016, our free cash flow increased by 56.5% quarter-on-quarter and by 3.4 times compared to the second quarter 2015. As a result, our free cash flow for the first half 2016 increased to 93 bln RUB.
In the first half 2016, our financial results decreased year-on-year, which was mainly due to lower average hydrocarbon prices, increase in the oil extraction tax base rate, lower compensation from the West Qurna-2 project, as well as decline in refining margins. This was partially offset by positive effect of ruble depreciation to US dollar and euro. Among other positive factors were higher refinery throughput volumes, substantial improvement in the refined product slate, increase in sales via high margin channels and effective cost control.
Our EBITDA excluding West Qurna-2 increased by 7.1% quarter-on-quarter and remained practically unchanged compared to the first half 2015.
In the second quarter 2016, our capital expenditures decreased by 3.0% compared to the previous quarter, and in the first half 2016 the year-on-year decrease in capital expenditures amounted to 20.8%. The decrease was mainly driven by completion of the main refinery upgrade program in Russia, transition to production maintenance stage at the West Qurna-2 project, decrease in exploration drilling expenditures at our international offshore projects and general optimization measures. At the same time we increased investments into our strategic growth projects in Timan-Pechora and Caspian regions.
In the first half 2016, our hydrocarbon production was 411.1 mln boe (2.3 mln boe per day), which is 4.3% lower compared to the same period of 2015. The decline was mainly due to lower volumes of compensation crude oil from the Western Qurna-2 project, disposal of our share in Caspian Investment Resources Ltd in 2015, as well as natural production decline at our brownfields in Western Siberia.
In the first half 2016, production of refined products at our refineries increased by 5.3% year-on-year. We achieved substantial improvement of the product slate due to launching new facilities in 2015 and the first half 2016. Refining depth at our Russian refineries increased by 8 p.p. year-on-year to almost 86%. We also undertook measures on optimizing capacity utilization at our refineries in Russia, including via cross-supplies of vacuum gasoil, which resulted in additional efficiency gains.
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