29 Aug 2018 16:21

Lukoil boosts H1 IFRS earnings 40% to 276 bln rubles

MOSCOW. Aug 29 (Interfax) - Lukoil boosted net profit to International Financial Reporting Standards (IFRS) 37.5% year-on-year in H1 2018 to 276.4 billion rubles, the oil company said in a report.

Net profit rose 53.4% quarter-on-quarter in Q2 2018 to 167.3 billion rubles. The profit growth was mainly driven by non-cash foreign exchange effects, as well as a gain on sale of diamond miner JSC Arkhangelskgeoldobycha in the second quarter of 2017. Excluding these factors, profit attributable to Lukoil shareholders increased by 47.4% year-on-year and by 35.6% quarter-on-quarter. The growth was constrained by higher DD&A.

The H1 and Q2 figures were close to the 279 billion rubles and 170 billion rubles that analysts at investment companies and banks predicted in a consensus forecast for Interfax. Aton's forecasts were closest at 276 billion rubles and 167 billion rubles.

Sales revenue in H1 2018 rose 32.1% year-on-year to 3.687 trillion rubles and in Q2 sales amounted to 2.056 trillion rubles, 26.1% higher quarter-on-quarter. The growth was mainly attributable to higher hydrocarbon prices, increase in oil trading volumes, weakening of ruble against the dollar and euro, as well as higher gas sales volumes. Lower international wholesale sales volumes of refined products as a result of higher domestic sales volumes and lower refined products trading volumes constrained the sales growth.

EBITDA increased by 33.1% year-on-year in H1 2018 to 514.7 billion rubles. In Q2 2018 EBITDA amounted to 295.2 billion rubles, increasing by 34.5% quarter-on-quarter. The year-on-year and quarter-on-quarter EBITDA growth was supported by the increased share of high-margin barrels in the total crude oil production, higher gas production in Uzbekistan, higher sales volumes via premium marketing channels. In addition, EBITDA growth was driven by higher hydrocarbon prices, weaker ruble against US dollar, positive crude oil export duty lag effect and inventory effect in the downstream. Among key constraining factors were domestic petroleum products prices lagging export netbacks.

Capex in H1 2018 for the first six months of 2018 amounted to 226.8 billion rubles, down 11.0% year-on-year. The decrease was driven by lower capital expenditures in the gas projects in Uzbekistan due to the launch of main production facilities. In the second quarter of 2018, capital expenditures decreased by 12.6% quarter-on-quarter to 105.7 billion rubles, mainly due to the payment schedule to the suppliers and contractors.

In Q2 2018, adjusted free cash flow increased by 65.4% quarter-on-quarter to a quarterly record of 152 billion rubles. As a result, for the first six months of 2018 adjusted free cash flow almost doubled year-on-year and amounted to 243.8 billion rubles. The growth was due to higher cash flows from operating activities and lower capital expenditures.

Free cash flow for H1 2018 was 183.1 billion rubles, up from 83 billion rubles a year previously.