Rosneft's financial performance

Main article: Rosneft Oil Company

2024: The largest oil company by revenue in Russia

2022: 3.3% revenue growth and 7.9% decline in net income

Rosneft's net profit in 2022 amounted to 813 billion rubles, which is 7.9% less than a year ago. The company reported a 3.2% increase in annual revenue, but did not specify the absolute figure in the statements published on March 20, 2023. At the same time, it was previously reported about revenue of 8.76 trillion rubles for 2021, which means that in 2022 it could reach 9.08 trillion rubles.

As explained in Rosneft, the drop in profits in 2022 is largely due to the influence of non-monetary factors. The achieved level of net profit is a solid basis for paying dividends for the reporting year, the company noted. Capital expenditures of Rosneft in 2022 increased by 7.9%, reaching 1.13 trillion rubles.

Rosneft's financial performance

We continued our active investment program - the volume of capital investments in 2022 exceeded 1.1 trillion rubles. It should be noted that over the past three years, the tax conditions for the activities of oil companies have been tightened 14 times, which undoubtedly creates risks for the implementation of our production program, - the words of the head of the company Igor Sechin are quoted in the message.

At the end of 2022, Rosneft processed 94.4 million tons of oil, and also sold a record 42.1 million tons of petroleum products on the Russian market. At the end of 2022, the depth of oil refining at Russian oil refining assets increased to 76.2%, the yield of light oil products - to 57.1%.

Gas production in 2022 amounted to a record 74.4 billion cubic meters. Rosneft has discovered 7 fields and 153 new oil and gas deposits. In particular, the Madachag field was discovered with reserves of 82 million tons, which became the largest discovered in Russia in 2022. Rosneft on land of the Russian Federation performed more than 4.4 thousand linear kilometers of seismic work 2D and over 6.8 thousand square meters. km of seismic work 3D. Completed 64 exploration wells with 80% success rate^[1]

2021

Second place in the ranking of the largest Russian companies in terms of capital investments

In November 2022, Forbes magazine published a rating of the largest Russian companies in terms of capital investments for five years - 2017-2021. During this period, the rating companies invested a total of almost 42 trillion rubles. Read more here.

Revenue growth by 52.2%, to 8.76 trillion rubles, profit - 883 billion rubles

Rosneft completed 2021 with revenue of 8.76 trillion rubles, which is 52.2% more than in 2020. Net profit was a record and reached 883 billion rubles, an increase of more than 6 times compared to profit a year ago. The company published its financial results on February 11, 2022.

It is noted that Rosneft in 2021 reflected a profit from the sale of assets in Vietnam and 50% in a joint venture with Gazprom Neft Tomskneft in the amount of 11 billion rubles.

The company's capital expenditures in 2021 increased by 33.6%, to 1.049 trillion rubles, in the fourth quarter - by 58.6% compared to the third quarter, to 360 billion rubles. Rosneft's increase in capital expenditures is associated with the planned implementation of the Vostok Oil project and with ensuring the implementation of the production program at the company's assets.

The company's net financial debt in 2021 decreased by $5.5 billion. The absolute value is not specified. The net debt/EBITDA ratio amounted to 1, 3x, having decreased by the end of the year almost 2 times since the beginning of the year. The high level of financial stability is supported by a multiple of the amount of liquid financial assets on the company's balance sheet and the available volume of credit lines over the short-term part of the debt, Rosneft said in a statement.

Rosneft's liquid hydrocarbon production in 2021 amounted to 1425.2 million barrels (192.1 million tons), a decrease of 6% compared to 2020 due to the disposal of a number of low-margin assets. Excluding disposed assets, the average daily production of liquid hydrocarbons increased by 1.5% year-on-year. Production continued to be affected by restrictions under the OPEC + agreement. Oil refining at the company's refineries in 2021 increased by 2.3% compared to 2020 - to 95.1 million tons^[2]

Sharp growth of foreign currency on the balance sheet

Rosneft has sharply increased the share of foreign currency on its balance sheet, storing in bank accounts revenues from soaring hydrocarbon prices and revenues from the sale of a stake in the Vostok Oil project.

During the third quarter, the currency "cushion" of the largest oil company Russia increased by $5 billion and 1.2 billion euros, follows from the reports published on November 19.

For 12 months, the volume of dollars in Rosneft's liquid assets almost tripled - from 4.9 to 13 billion dollars, and the euro's reserves soared 14 times - from 0.3 billion to 4.2 billion.

The company, which accounts for every second barrel extracted from Russian subsoil, prefers to save foreign currency: its ruble assets for the year, although they increased, but significantly less - only by 10%, to 592 billion rubles as of September 30.

Rosneft overtook BP in capitalization for the first time

On September 27, 2021, Rosneft overtook BP in market capitalization. This is evidenced by the data of the London Stock Exchange.

According to Vedomosti, on September 27, 2021, the value of Rosneft at the time of the opening of trading was $90.6 billion against BP's $87.7 billion. Since the beginning of the year, the rate of quotations of the Russian oil company on the London and Moscow stock exchanges has risen by about 40%.

The publication notes that Rosneft is the main beneficiary of rising oil prices in Europe, the countries of the former USSR and the Middle East, wrote earlier in its Bank of America Merrill Lynch review. According to the bank, the fair value of Rosneft's share is $9.9, that is, the growth potential from current levels is about 20%.

Rosneft overtook BP in capitalization for the first time

According to analysts, Rosneft has not yet revealed its full growth potential of the company. So, in early September 2021, investment bank JP Morgan raised its target price for the company's shares by 14%, to $10 per GDR (equal to one share). As noted in the bank, Rosneft has the highest securities growth potential among Russian oil and gas companies thanks to the Vostok Oil project, which is not yet fully reflected in the market's assessment of the company.

According to the investment strategist of the Arikapital management company Sergei Suverov, market conditions are becoming an important factor in the growth of Rosneft shares:

A cold winter and a shortage of gas in the market could lead to higher oil prices. And Rosneft may become the main beneficiary of this.

According to the expert, since December 2017, when the fundamental strategy of the company was approved until 2022, the value of its shares has grown by more than 2.1 times. Analysts are generally optimistic about Rosneft's prospects, based on its financial results in recent years.^[3]

2020

Rosneft's combined revenue - 62,913,789 thousand rubles

At the end of 2020, the company Rosneft"" increased revenue by 7% - up to 62,913,789 thousand rubles Data include the combined revenue of four Rosneft insourcing companies with the following turnover for 2020: LLC IC "" Sibintek(56,565,923 thousand rubles), LLC "Sibintek -" Software(5,329,155 thousand rubles), LLC "" Expertek IBS(588,460 thousand rubles), LLC "" Visualization Laboratory - Sphere(430,251 thousand rubles). In the ranking, TAdviser "The largest IT insourcing companies in Russia Rosneft took first place. In 2019, the same figure was 58,759,781 thousand rubles.

Revenue drop by 42.6%, to 5.75 trillion rubles, profit drop by 80%, to 181 billion rubles

Rosneft at the end of 2020 received revenue in the amount of 5.75 trillion rubles, which is 42.6% less compared to 2019. The company linked this decline to the impact of the COVID-19 coronavirus pandemic and production restrictions set by the OPEC + agreement.

Rosneft's net profit in 2020 fell by almost 80%, amounting to 181 billion rubles. In 2019, such profit was measured at 802 billion rubles. In the fourth quarter of 2020, net profit was a record due to the positive effect of transactions under the Vostok Oil project.

For 2020, Rosneft's capital investments amounted to 785 billion rubles, a decrease of 8.1% compared to 2019. Specific capital expenditures in the Exploration and Production segment decreased by almost 10%. The optimization of capital expenditures corresponds to the previously announced plans and is due to the revision of the company's investment program within the framework of directives brought by the authorized state body to reduce oil production, Rosneft said in a statement.

Net profit of Rosneft in 2020 fell by 80%

At the end of 2020, Rosneft's free cash flow amounted to 425 billion rubles, down 54.8% compared to 2019. The company called this result good in the conditions of cheaper oil and restrictions on its production. Rosneft's free cash flow has remained positive for 9 years in a row.

The total volume of Rosneft's obligations, including payables and deferred tax obligations, reached about 8.5 trillion rubles by the end of 2020.

In 2020, the share of the short-term part of financial debt continued to decline; at the end of 2020, the figure was 17%. The amount of liquid financial assets and the available volume of credit lines almost tripled the short-term part of financial debt.^[4]

Q1: Net loss 156 billion rubles, debt - 4.228 trillion

Rosneft completed the first quarter of 2020 with a net loss of 156 billion rubles (according to IFRS). This happened for the first time in 8 years. In addition, the average price of Urals oil was $48.

We expected a negative quarterly result - the first since 2012 - but its scale almost doubled the forecast: on average, analysts polled by Interfax pledged 90 billion rubles of loss.

According to the financial results of the company, the devaluation of the ruble hit, from which the debt, approximately half denominated in foreign currency, increased sharply in ruble terms.

Although Rosneft repaid $1.6 billion in foreign currency obligations, and increased ruble loans by only 35 billion rubles, due to the growth of the dollar - by 27% in January - the total amount of the company's debt jumped from 3.828 to 4.228 trillion rubles.

If we take into account the debt under prepaid contracts, Rosneft pledged raw materials not yet mined to obtain loans in China, then the company's debt burden increased to 4.888 trillion rubles ($67 billion).

According to the results of the quarter, Rosneft reduced oil production by 2.2% (4.64 million barrels per day), gas production by 3% (16.63 billion cubic meters), while the fall of the ruble was not enough to compensate for the decline in world oil prices. The average cost of selling Urals fell both in dollars (by 21.8%) and in rubles (by 18.5%).

2018: Debts 5.8 trillion rubles

At the end of 2017, Rosneft's debts amounted to 5.6 trillion rubles, and in 2018 they grew by another 200 billion. Servicing those debts eats up a decent chunk of the company's profits, and tends to rise. Considering that the net profit for 2018 amounted to about 550 billion rubles, Rosneft's debts will be paid by distant descendants.

Rosneft is the most credited oil company in Russia. Rosneft's net debt is higher than the size of the National Welfare Fund of the Russian Federation.

Net debt to EBITDA ratio of Rosneft 2.2x including prepayment under long-term supply contracts. The rest of the oil workers of the Russian Federation have practically no debt.

Rosneft is more credited than many major oil companies, such as Exxon. However, there are companies with a greater credit burden. For example, PDVSA.

EBITDA per barrel for 2018: Lukoil and Tatneft at $21, Surgutneftegas $16, Rosneft $15, Gazpromneft $14.

Rosneft is one of the most underutilized companies in terms of creating shareholder value.

Rosneft pays the least dividends from every barrel of oil produced.

Since the IPO by April 2019, Rosneft has not earned anything for its investors in dollars, even taking into account the dividends paid.

Dollar yield on Russian oil industry shares including dividends since Rosneft IPO.

2015: Rosneft's top management revenues grew by 31% in 2015

Rosneft's top management revenues grew in 2015 by 31.5% compared to 2014 - to 3.682 billion rubles, RNS reports citing the company's quarterly report.

It is noted that the board of the company includes 11 people. Thus, the average income of a board member in 2015 amounted to almost 335 million rubles. A year earlier, they received an average of 254.3 million rubles.

It was also reported that the revenues of Gazprom's top management increased by 6.2%.

2014: Rosneft's net profit down nearly 10%

Rosneft's net profit in 2014 decreased by 9.8% compared to 2013 and amounted to 350 billion rubles ($9.3 billion). Profit attributable to Rosneft shareholders amounted to 348 billion rubles.

Rosneft increased its sales revenue by 17.2% to 5.503 trillion rubles. Basically, revenue growth is associated with an increase in sales volumes and depreciation of the ruble, which partially compensated for the fall in oil prices, Rosneft noted. In dollar terms, revenue amounted to $146.7 billion, which is comparable to the level of 2013.

Profit before interest, income tax and amortisation (EBITDA) increased by 11.6% - to 1.057 trillion rubles.

Rosneft's net debt in dollar terms decreased by $13.6 billion. The debt burden in ruble terms was significantly affected by the negative effect of the depreciation of the ruble against foreign currency, which does not affect the debt burden in dollar terms, given the stability of revenue and the planned repayment of all loan obligations, the oil company noted.

In 2014, Rosneft transferred more than 3 trillion rubles to the budget.

Notes