TIDMLKOD
RNS Number : 0220K
PJSC LukOil
27 August 2021
LUKOIL ANNOUNCES IFRS FINANCIAL RESULTS
FOR THE SECOND QUARTER AND SIX MONTHS OF 2021
PJSC "LUKOIL" released its condensed interim consolidated
financial statements for the three and six month periods ended June
30, 2021 prepared in accordance with International Financial
Reporting Standards (IFRS).
Financial Highlights
2Q 1Q 6M 6M
2021 2021 2021 2020
-------- -------- ------------------------------------------ -------- --------
(RUB bln)
2,201.9 1,876.5 Sales 4,078.4 2,652.4
339.8 314.4 EBITDA 654.2 295.3
Profit (loss) for the period attributable
189. 8 157.4 to LUKOIL shareholders 34 7.2 (64.7)
104. 2 107.2 Capital expenditures 211. 4 247.5
16 3 .
112.2 6 Free cash flow 275.8 81.0
212. 187. Free cash flow before changes in
0 7 working capital 399.7 45.4
-------- -------- ------------------------------------------ -------- --------
COVID-19
Since the start of COVID-19 pandemic, LUKOIL has been
undertaking necessary measures to rule out the direct impact of the
pandemic on the Group's operating activity, prioritizing proper
protection of its employees, contractors personnel and clients, as
well as continuity of production processes.
Weaker global economic activity amid the pandemic followed by an
unprecedented slump in hydrocarbon demand and prices had a
significant negative impact on operational and financial
performance of the Group in 2020 with persisting negative effect in
the first half of 2021.
The consequences of the pandemic for the Company's operating
results include: crude oil production cut at the Company's fields
in Russia and certain international projects due to the OPEC+
agreement; gas production cut in Uzbekistan in 2020 due to
temporarily lower demand for Uzbek gas from China; reduction of
refinery throughput volumes due to lower refining margins and lower
demand for some refined products; and lower sales volumes of motor
fuels through filling stations because of lower demand.
The main impact of the pandemic on the Company's financial
performance is attributed to volatility in prices for crude oil and
refined products as well as lower production volumes.
OPEC+ agreement
On April 12, 2020 a number of oil-producing countries, including
OPEC members and Russia, entered into an agreement that aims to
reduce their collective crude oil output starting from May 1, 2020
with subsequent gradual increase. Due to the agreement, in May,
2020, the Company cut its crude oil production in Russia by
approximately 310 thousand barrels per day as compared to the
average daily production in the first quarter of 2020. Later the
Company has been gradually increasing crude oil production in
Russia. As a result, in the second quarter of 2021 the Group's
crude oil production in Russia was approximately 170 thousand
barrels per day higher as compared to the level of May, 2020.
Crude oil production was also reduced at certain international
projects. In particular, production at the West Qurna-2 project in
Iraq in the second quarter of 2021 was approximately 50 thousand
barrels per day lower than the project capacity.
Sales
In the second quarter of 2021, our sales amounted to RUB 2,201.9
bln, up 17.3% quarter-on-quarter. The growth was mainly
attributable to higher prices for crude oil and refined products,
higher oil production and trading volumes, as well as higher
refinery throughput volumes and retail sales volumes of refined
products in Russia and internationally. These factors were
partially offset by lower refined products trading volumes.
As compared to the six months of 2020, our sales increased by
53.8% mainly due to higher hydrocarbon prices and ruble
devaluation. The growth was constrained by lower oil production and
refinery throughput volumes, as well as trading volumes.
EBITDA
2Q 1Q 6M 6M
2021 2021 2021 2020
------ ------ --------------------------------------- ------ ------
(RUB bln)
339 . 654 .
8 314.4 EBITDA 2 295.3
220.9 223.8 Exploration and production 444.7 181.5
193.4 187.0 Russia 380.3 137.5
27.5 36.8 Outside Russia 64.4 44.0
126.9 120.2 Refining, marketing and distribution 247.2 119.0
85.0 66.6 Russia 151.6 94.8
41.9 53.6 Outside Russia 95.5 24.2
------ ------ --------------------------------------- ------ ------
In the second quarter of 2021, EBITDA increased by 8.1%
quarter-on-quarter to RUB 339.8 bln.
Besides higher oil prices, EBITDA of the Exploration and
production segment in Russia was positively affected by higher oil
production volumes due to the OPEC+ agreement. The growth was
constrained by lower positive time lag effect of export duty and
MET. Outside Russia, EBITDA dynamics was mainly attributable to
lower costs at the West Qurna-2 project, as well as lower gas
production in Uzbekistan.
The main growth factors for the EBITDA of the Refining,
Marketing and Distribution segment in Russia were higher refining
margins and throughput volumes, as well as better results in
petrochemicals, lubricants and aircraft fueling. The growth was
constrained by lower positive inventory effect at the refineries
and lower retail margins. Outside Russia EBITDA was lower mainly
due to the specifics of accounting for hedging operations in
international trading, as well as lower positive inventory effect
at the refineries. The negative impact of these factors was
partially offset by better results of international trading and
retail businesses, as well as higher refinery throughput volumes
and margins.
As compared to the six months of 2020, EBITDA more than doubled
mainly as a result of higher hydrocarbon prices, ruble devaluation,
positive time lag effect of export duty and MET, as well as
inventory effect at the refineries and better results in
international trading and petrochemicals. EBITDA growth was
constrained by lower oil production volumes, elimination of tax
incentives for high-viscous crude oil and lower international
refining margins.
Profit for the period
In the second quarter of 2021, profit attributable to PJSC
LUKOIL shareholders amounted to RUB 189.8 bln, which is 20.5%
higher quarter-on-quarter. As a result, for the first six months of
2021 profit was up to RUB 347.2 bln as compared to a loss of RUB
64.7 bln for the six months of 2020.
Besides higher EBITDA, profit dynamics is attributable to
non-cash losses from assets impairment in 2020.
Free cash flow
In the second quarter of 2021, free cash flow before changes in
working capital amounted to RUB 212.0 bln, which is 12.9% higher
quarter-on-quarter. As a result, for the first six months of 2021
it increased to RUB 399.7 bln as compared to RUB 45.4 bln for the
six months of 2020. The growth is attributable to higher operating
margins and lower capital expenditures.
Operating highlights
2Q 1Q 6M 6M
2021 2021 2021 2020
-------- ------ ------------------------------------- ------ -------
2 , 100 2,198 Hydrocarbon production, Kboepd 2,149 2,223
2,065 2,152 excluding West Qurna-2 2,109 2,155
Liquid hydrocarbon production,
1,643 1,624 Kbpd 1,633 1,744
1,608 1,578 excluding West Qurna-2 1,593 1,676
7 . 1 8.8 Gas production, billion cubic meters 15.9 14 . 8
Production of refined products
15.1 13.6 at own refineries, million tonnes 28.7 28.6
-------- ------ ------------------------------------- ------ -------
For the six months of 2021 LUKOIL Group's average hydrocarbon
production excluding the West Qurna-2 project was 2,109 thousand
boe per day, which is 2.1% lower year-on-year, while in the second
quarter of 2021 hydrocarbon production increased by 4.2%
year-on-year. The production dynamics was attributable to the
dynamics of the external limitations on oil production due to the
OPEC+ agreement. Hydrocarbon production was 4.0% lower
quarter-on-quarter due to the dynamics of gas production in
Uzbekistan.
Liquid hydrocarbons
Liquid hydrocarbons production excluding the West Qurna-2
project was 1,593 thousand barrels per day for the six months of
2021, which is 5.0% lower year-on-year, while in the second quarter
of 2021 liquid hydrocarbon production increased by 1.9%
quarter-on-quarter to 1,608 thousand barrels per day. Oil
production dynamics was driven by the OPEC+ agreement concluded in
April 2020, which led to limitations on oil production by the Group
in Russia and at certain international projects.
Despite external limitations on production volumes, development
of the priority projects continued. In particular, in West Siberia
total oil and gas condensate production for the six months of 2021
at the V. Vinogradov, Imilorskoye, Sredne-Nazymskoye and
Pyakyakhinskoye fields increased by 7.3% year-on-year, to 2.2
million tonnes.
High-viscous oil production at the Yaregskoye field and Permian
reservoir of the Usinskoye field for the six months of 2021
increased by 5.1% year-on-year, to 2.6 million tonnes.
Implementation of drilling programs at the V. Filanovsky and Yu.
Korchagin fields in the Caspian Sea allowed to increase total oil
and gas condensate production for the six months of 2021 by 1.7%
year-on-year, to 3.7 million tonnes. The V. Grayfer field
development continued: subsea pipelines and cable lines are being
laid, topsides of the platforms are being constructed at the
shipyards .
Gas
For the six months of 2021, gas production increased in average
daily terms by 7.7% year-on-year, to 15.9 billion cubic meters. The
growth was driven by recovery of gas production in Uzbekistan after
temporary decline in 2020 due to lower demand from China for gas
produced in Uzbekistan amid the COVID-19 pandemic.
In the second quarter of 2021, gas production decreased in
average daily terms by 20.4% quarter-on-quarter, to 7.1 billion
cubic meters. The decrease was mainly attributable to scheduled
maintenance works at the projects in Uzbekistan.
Refined products
For the six months of 2021 production of refined products at
LUKOIL Group's refineries was 28.7 million tonnes, which is 1.1%
higher year-on-year in average daily terms.
In the second quarter of 2021 production of refined products was
15.1 million tonnes, which is 11.2% higher quarter-on-quarter and
19.7% higher year-on-year. The increase in production of refined
products both in and outside Russia was attributable to the
recovery of refineries utilization rates after scheduled
maintenance works, as well as throughput optimization at some of
the refineries driven by the changes in macro environment.
http://www.rns-pdf.londonstockexchange.com/rns/0220K_1-2021-8-27.pdf
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http://www.rns-pdf.londonstockexchange.com/rns/0220K_3-2021-8-27.pdf
Information:
Full set of PJSC "LUKOIL" condensed interim consolidated
financial statements prepared in accordance with IFRS for the
second quarter and six months of 2021 is available on the Company's
web site: www.lukoil.com. These condensed interim consolidated
financial statements have been prepared by the Company in
accordance with IFRS and have not been audited by our independent
auditor. If these financial statements are audited in the future,
the audit could reveal discrepancies, and we cannot give any
assurance that any such discrepancies would not be material.
PJSC LUKOIL is one of the largest publicly traded, vertically
integrated oil and gas companies in the world in terms of proved
hydrocarbon reserves and production; and the second largest
producer of crude oil in Russia. Established in 1991, the Company
currently operates in more than 30 countries with core upstream
assets located in Russia. The full production cycle includes oil
and gas exploration, production and refining; production of
petrochemicals and lubricants; power generation, marketing and
distribution. The Company's shares are listed in Russia on Moscow
Exchange under the ticker "LKOH" and depositary receipts are listed
on the London Stock Exchange under the ticker "LKOD".
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END
IR ZZGZRRNZGMZG
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August 27, 2021 05:00 ET (09:00 GMT)
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