Lukoil boosts IFRS net profit 1.5-fold to 62.3 bln rubles in Q1
MOSCOW. May 30 (Interfax) - Lukoil posted 62.3 billion rubles in net profit to International Financial Reporting Standards (IFRS) in Q1 2017, up 45.5% compared to the same period last year, the oil company said in a statement.
Analysts had forecast net profit of 52 billion rubles, with Renaissance Capital's forecast coming closest at 60 billion rubles.
Net profit rose 33.7% quarter-on-quarter. Profit was significantly impacted by non-cash foreign exchange loss. Excluding this item, profit attributable to Lukoil shareholders amounted to 97.1 bln rubles, a 22.7% increase year-on-year.
Sales grew 2.2% quarter-on-quarter to 1.43 trillion rubles, mainly driven by higher wholesale volumes of the refined products internationally due to the increased trading volumes. Sales rose 21.6% year-on-year, primarily due to the higher sales prices, as well as higher sales volumes of crude oil and refined products internationally resulting from the increase in trading volumes.
Earnings before taxes, depreciation and amortization (EBITDA) increased to 207.6 billion rubles or by 13.3% and 8.2% as compared to the fourth quarter of 2016 and the first quarter of 2016, respectively. EBITDA was positively impacted by the growth of high-margin volumes in overall production, improvement in the refined product slate at Lukoil's own refineries, as well as decrease in SG&A expenses, which were partially offset by the ruble appreciation, introduction of the incremental fixed component to the oil mineral extraction tax (MET) formula, increase in excise taxes on refined products and transportation tariffs. Year-on-year EBITDA growth was significantly impacted by lower volumes of compensation crude oil from the West Qurna-2 project in Iraq. EBITDA net of this project increased 20.1%.
Capital expenditures amounted to 130.2 billion rubles for Q1 2017, down 6.8% quarter-on-quarter and up 3.5% year-on-year. Capital expenditures dynamics were mainly driven by the completion of a major upgrade program at refineries and seasonal factors.
Free cash flow before changes in working capital amounted to 67.1 billion rubles, up by 16.8% and 74.8% year-on-year and quarter-on-quarter.
Lukoil produced 164 million barrels of liquid hydrocarbons in Q1 2017, down from 182.6 million barrels a year previously. Production fell due mainly to a reduction in compensation crude oil volumes from the West Qurna-2 project in Iraq. Average daily production excluding this project was 1.1% lower year-on-year, mainly due to the temporary external limitations of Russian companies' production volumes. However, production growth continued as planned at the V. Filanovsky and Pyakyakhinskoye fields that were brought into production in the second half of 2016.
Gas production amounted to 6.5 billion cubic meters, representing an increase of 2.8% year-on-year and no change quarter-on-quarter. Gas production was positively impacted by the launch of gas production at the Pyakyakhinskoye field at the beginning of 2017.
Production of refined products at Lukoil's own refineries increased by 2.5% year-on-year in Q1 2017 mainly due to the higher utilization rates at refineries in Perm, Volgograd and Burgas. There was a significant improvement in product slate due to reaching design parameters of the new conversion facilities. In particular, light product yield at our Russian refineries increased by 5 percentage points to 65%. The improvement in production efficiency of the Russian refineries was also attributable to the optimization of feedstock mix and capacity utilization, including the cross-supplies of refined products.
Production of refined products decreased by 3.4% quarter-on-quarter, driven by maintenance works at Lukoil's refineries in Nizhny Novgorod and Ploiesti.
In Q1 2017, the volume of crude oil exports from Russia increased by 6.2%, and Lukoil exported 46.6% of its domestic crude oil production, compared with 42.9% in Q1 2016, and 116,000 tonnes of crude oil purchased from affiliates and third parties, up from 105,000 tonnes. The increase in export volumes was a result of lower domestic sales. The volume of refined product exports decreased 4.2% year-on-year.