Today, Bashneft Group, which comprises PJSOC Bashneft and its subsidiaries, has released its audited consolidated financial statements for the fourth quarter and the twelve months ended December 31, 2015 prepared in accordance with International Financial Reporting Standards (IFRS).

'In 2015 the Company not only proved once again that it is an industry leader in terms of production growth and refinery performance, but also achieved strong financial results,' commented Bashneft’s President Alexander Korsik. 'Last year’s results reflect our commitment to a long-term strategy that involves steady growth of operating and financial results, guaranteed dividend payments and further growth of shareholder value.'

2015 vs. 2014:

• The Group’s revenue from sales decreased by 4.1% to 611,274 million roubles.
• Adjusted EBITDA increased by 27.1% to 130,286 million roubles.
• Net income attributable to the shareholders of the parent company increased by 34.8% to 58,175 million roubles.
• Operating cash flow fell by 13.0% to 92,313 million roubles.
• Capital expenditure grew by 27.6% to 61,695 million roubles.
• Adjusted net debt decreased by 13.7% to 98,052 million roubles.

4Q 2015 vs. 3Q 2015:

• The Group’s revenue from sales decreased by 11.7% to 147,970 million roubles.
• Adjusted EBITDA dropped by 19.3% to 30,228 million roubles.
• Net income decreased by 68.6% to 6,897 million roubles.
• Operating cash flow fell by 37.5% to 22,065 million roubles.
• Capital expenditure rose by 23.1% to 18,833 million roubles.
• Adjusted net debt decreased by 3.6% to 98,052 million roubles.

Main drivers of the Company’s financial performance in 2015 included an increase in oil production, optimization of refining volumes aimed at maximization of light product output, and favourable conditions in the domestic market for petroleum products and petrochemicals.

Domestic sales of crude oil increased by 95.6% year on year to 2.6 million tonnes, while revenue from sales soared by 107.0% (to 32,565 million roubles). This growth partially offset a 6.7% decrease in revenue from crude oil exports (to 126,459 million roubles) and a 14.0% fall in revenue from export sales of petroleum products (to 187,196 million roubles) outside the Customs Union.

In 2015 domestic sales of petroleum products and petrochemicals decreased by 5.6% (to 9.8 million tonnes) as a result of a planned reduction in refining, with revenue from sales growing by 0.7% year on year to 240,962 million roubles. This result was achieved due to optimization of the petroleum product mix and an increase in fuel sales via Bashneft’s own retail network. Thus, in 2015 retail sales of fuel grew by 4.3% to 1.6 million tonnes, while revenue from retail sales gained 10.1% (reaching 58,184 million roubles).

In the fourth quarter of 2015, the Company’s revenue decreased by 11.7% quarter on quarter (to 147,970 million roubles). This was related mainly to deterioration in the pricing environment on the foreign market, which resulted in an 18.6% reduction in revenue from crude oil export outside the Customs Union (to 26,917 million roubles). In addition, a reduction in the output of light petroleum products during scheduled repairs at a number of process units combined with a seasonal fall in prices caused a 22.9% decrease in revenue from wholesale distribution of petroleum products in Russia in the fourth quarter of 2015 (to 45,703 million roubles).

In 2015 adjusted EBITDA increased by 27.1% to 130,286 million roubles. Net income attributable to the shareholders of the parent company increased by 34.8% to 58,175 million roubles.

In the fourth quarter of 2015, adjusted EBITDA declined by 19.3% quarter on quarter (to 30,228 million roubles). In the fourth quarter of 2015, net income slumped by 68.6% (to 6,897 million roubles), which was caused by an increase in depletion and depreciation costs and predominantly non-cash other operating expenses.

In 2015 operating cash flow dropped by 13.0% (to 92,313 million roubles), which was due mainly to a high base in 2014, when Bashneft received prepayment under a long-term contract for supply of petroleum products totalling US$ 500 million, and to changes in working capital.

A 37.5% quarter-on-quarter decline in operating cash flow in the fourth quarter of 2015 (to 22,065 million roubles) was caused by a decrease in operating income and changes in working capital. Nevertheless, despite the decrease, in 2015 operating cash flow enabled the Company to finance a growing capital investment programme and to reduce debt.

A 27.6% increase in capital expenditure in 2015 (to 61,695 million roubles) was related mainly to a rise in investment in the development of the Sorovskoye field and growing capital expenditure on brownfields in the Republic of Bashkortostan. A 23.1% quarter-on-quarter increase in capital expenditure in the fourth quarter of 2015 (to 18,833 million roubles) was also related mainly to an increase in investment in oil production.

As of December 31, 2015, the Group’s total debt amounted to 136,007 million roubles, down by 10.0% compared to September 30, 2015 (151,086 million roubles). As of December 31, 2015, adjusted net debt amounted to 98,052 million roubles, down by 13.7% compared to December 31, 2014 (113,637 million roubles) and down by 3.6% compared to September 30, 2015 (101,745 million roubles).

KEY FINANCIAL AND OPERATING RESULTS FOR THE FOURTH QUARTER AND THE TWELVE MONTHS OF 2015

Documentation

Bashneft Group IFRS financial results for 2015 (MD&A)

Full text (PDF, 2.13 ÌÁ)

Bashneft Group IFRS financial results for 2015 (Presentation)

Full text (PDF, 506.25 ÊÁ)

Bashneft Group Consolidated Financial Statements for 2015

Full text (PDF, 1.13 ÌÁ)