ROSNEFT OIL COMPANY: Financial results for 4Q 2020 and 12M 2020Source: EQS
ROSNEFT OIL COMPANY (ROSN)
Financial results for 4Q 2020 and 12M 2020
Consolidated IFRS financial results for 4Q 2020 and for 2020:
1Net income is restated for the effect of finalized purchase price allocation of 2019 acquisitions.
2The calculation includes interest expense on the prepayments on the long-term oil and petroleum products supply agreements. Previous periods have been adjusted for comparability for net change of subsidiary banks operations in operating activity.
3Calculated using average monthly
Commenting on financial results of 2020 Rosneft's Chairman of the Management Board and Chief Executive Officer
"Today we release operating and financial results for 2020, a year which proved to be very difficult for the global oil and gas industry. The pandemic of new coronavirus infection led to an unprecedented drop in crude oil demand. The volatility of oil prices was at a critical level. At the same time, Rosneft fulfilled its obligations to balance market demand and supply as requested by the Russian Government.
Today we can proudly state that we were not only able to successfully meet the challenges of 2020, but also demonstrated the ability to work in challenging conditions of unprecedented low prices. This was made possible by the high level of operational and investment efficiency. In the fourth quarter, the unit upstream operating cost decreased to
In 2020 we reshaped and upgraded our upstream portfolio. We divested certain "tail" assets which are depleted with high water cut and as consequently low-margin and less attractive from a capital return point of view, and/or assets where depletion subsidies have been cancelled. At the same time we refocused on large projects which are low cost, high-margin, with high-quality resources and a low carbon footprint. A key step in this transformation at the end of 2020 was the formation of the "Vostok Oil" shareholding structure with the entry of one of the largest global trading companies allowing for the practical start of the execution of the project activities. This set of transactions will reshape the Company, making it adequate to the external challenges.
«Vostok Oil» is undoubtedly the world's largest new hydrocarbon project. In the coming years, the necessary infrastructure will be created for the organization of production and supply in 2024. The output will reach 100 million tonnes early next decade. «Vostok Oil», being an important milestone in the development of the Company, will become a new oil and gas province in the north of
«Vostok Oil» and other investment projects of the Company will enable the growth of the shareholder value and dividend yield for our shareholders. Despite the difficulties in 2020 the Company generated Net profit which sets a base for the dividends in accordance with the dividend policy".
Revenues and equity share in profits of associates and joint ventures
4Q 2020 revenues and equity share in profits of associates and joint ventures amounted to RUB 1,521 bln (
In 2020 revenues fell by 33.6% to
4Q 2020 EBITDA amounted to
The decrease in EBITDA in annual terms, in addition to a decrease in revenue, was caused by an increase in the tax burden, mainly by the negative impact of damping component of the reverse excise duty, which was partially offset by a decrease in general and administrative expenses by 9.3%.
4Q 2020 unit upstream operating costs decreased to a record low of
As a result of the management's efforts to constantly monitor costs and implement activities aimed at efficiency enhancement, the unit upstream operating costs reduced to
Net income/(loss) attributable to Rosneft shareholders
In 4Q 2020 Net income reached a record high of
The positive dynamics in 4Q 2020 contributed to the positive Net income in full-year 2020 of RUB 147 bln (
In 2020 capital expenditures amounted to
Free cash flow
Despite external challenges, the Company continues to generate positive free cash flow, which amounted to
The Company' s free cash flow remained positive for 9 consecutive years.
In 2020 financial debt decreased by
Rosneft Information Division
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These materials contain statements about future events and expectations that are forward-looking in nature. Any statement in these materials that is not a statement of historical fact is a forward-looking statement that involves known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements expressed or implied by such forward-looking statements to differ. We assume no obligations to update the forward-looking statements contained herein to reflect actual results, changes in assumptions or changes in factors affecting these statements.
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