Presentation 2Q09 - English audio (presentation only)
-
Upload
gazprom-neft -
Category
Investor Relations
-
view
468 -
download
2
description
Transcript of Presentation 2Q09 - English audio (presentation only)
2 Q 2009 US GAAP Financial and Operating Results
September 9, 2009
2
Disclaimer
This presentation contains forward-looking statements concerning the financial condition, results of operations and businesses of Gazprom Neft and its consolidated subsidiaries. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are statements of future expectations that are based on management’s current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward-looking statements include, among other things, statements concerning the potential exposure of Gazprom Neft to market risks and statements expressing management’s expectations, beliefs, estimates, forecasts, projections and assumptions. These forward-looking statements are identified by their use of terms and phrases such as ‘‘anticipate’’, ‘‘believe’’, ‘‘could’’, ‘‘estimate’’, ‘‘expect’’, ‘‘intend’’, ‘‘may’’, ‘‘plan’’, ‘‘objectives’’, ‘‘outlook’’, ‘‘probably’’, ‘‘project’’, ‘‘will’’, ‘‘seek’’, ‘‘target’’, ‘‘risks’’, ‘‘goals’’, ‘‘should’’ and similar terms and phrases. There are a number of factors that could affect the future operations of Gazprom Neft and could cause those results to differ materially from those expressed in the forward-looking statements included in this presentation, inclusively (without limitation): (a) price fluctuations in crude oil and oil products; (b) changes in demand for the Company’s products; (c) currency fluctuations; (d) drilling and production results; (e) reserve estimates; (f) loss of market and industry competition; (g) environmental and physical risks; (h) risks associated with the identification of suitable potential acquisition properties and targets, and successful negotiation and completion of such transactions; (i) economic and financial market conditions in various countries and regions; (j) political risks, project delay or advancement, approvals and cost estimates; and (k) changes in trading conditions. All forward-looking statements contained in this presentation are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers should not place undue reliance on these forward-looking statements. Each forward-looking statement speaks only as of the date of this presentation. Neither Gazprom Neft nor any of its subsidiaries undertake any obligation to publicly update or revise any forward-looking statement as a result of new information, future events or other information.
3
Management Participants in Today’s Call
Vadim YakovlevDeputy Chairman of the Management Board and CFO
Anatoly ChernerDeputy Chairman of the Management Board, Deputy CEO for Refining and Marketing
Yuri KalnerHead of Strategic Planning Department
Boris ZilbermintsDeputy Chairman of the Management Board, Deputy CEO for Exploration and Production
4
2 Q and 1H 2009 Highlights
• Increase in Daily Production +2,9% in 2Q 2009
• Rebranding program launched - 230 new style stations by the end of 2009
• Consolidation of Sibir Energy
• Consolidation of Moscow Refinery
• Acquisition of Chelyabinsk region retail chain (+ 41 gas stations and 2 tank farms) – April 2009 (approx. $ 35 MM)
5
Key macroeconomic factors: crude pricing environment is steadily improving
• In 2Q09 Brent prices averaged at $59/bbl (-51% y-o-y, +34% q-o-q), Urals prices averaged at $59/bbl (-50% y-o-y, +33% q-o-q)
• In 2Q09 Russian Ruble depreciated vs. US Dollar by 27% y-o-y and appreciated by 5% q-o-q.• In 2Q09 Russian CPI inflation stood at 2,0% vs. 3,9% in 2Q08 and 5,4% in 1Q09.• Despite 50% average Urals price decline y-o-y in 2Q09 to 59/bbl, crude exports netback adjusted downwards by
MET reduced only 42% to $25/bbl.
Source: Platt’s, Federal Statistics Service, Company data, Central Bank of Russia, Argus
Crude pricing, RUR/USD Rate (eop) Crude Export Profitability (per bbl)
20
40
60
80
100
120
140
160
Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-095
10
15
20
25
30
35
40
Urals, $/bbl (lhs) RUR/$ rate (rhs)
($40)
($20)
$0
$20
$40
$60
$80
$100
$120
$140
$160
Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09
Crude export netback less MET in Western Siberia MET Crude export duty Urals (cif Novorossiysk)
Urals down 50%
Netback less MET down 42%
58,5
117,4
35,925,2
6
42.3% 21.2% 9%
Key macroeconomic factors: crude exports netback outperformed refining netbacks in 1H09
Source: Company data
• One of the key trends observed both in 1H09 and 2Q09 was sharp reduction of refining profitability in Russia. In 2Q09 refining netbacks at all Gazprom Neft’s refineries was lower than that of crude oil export shipments.
• Going forward given crude prices staying at current level and recovered domestic prices for oil products refining netback should again exceed that of crude exports.
41.2% 18.7% 8%
ONPZ MNPZ YANOS
Refining netback, $/bblCrude exports netback, $/bblCIS crude exports netback, $/bbl
ONPZ MNPZ YANOSONPZ MNPZ YANOS
62,1
60,7
33,5
35,2
23,8
22,5
72,5
66,763,4
24,3
21,6 21,7
32,2 30,9 29,5
2Q08 1Q09 2Q09
7
$1 534
$3 607
1H08 1H09
$5 413$2 459
1H08 1H09
$18 002
$9 365
1H08 1H09
• Existing fiscal regime was the main contributor to thesurpassing quarterly EBITDA growth
• Rouble appreciation and commitment to Refining played negative role in EBITDA growth
• Gain from Sibir Energy acquisition and Fx gain were the main reasons for outstanding Net Income growth
$9 957 $10 085$4 988 $4 185 $5 180
2Q08 3Q08 4Q08 1Q09 2Q09
Gazprom Neft’s Key Financials, $ mln
Revenues*
EBITDA
Net Income
(48%)24%
(48%)
$3 204 $2 765
$416 $957 $1 501
2Q08 3Q08 4Q08 1Q09 2Q09
(55%)
$2 196 $1 594
-$543
$335$1 200
2Q08 3Q08 4Q08 1Q09 2Q09
(57%)
(53%)57%
(45%)258%
* Revenues for 2007 and 1-3Q08 were adjusted for excise tax that was previously excluded (2007 –$ 0.7B; 1Q08 – $0.2B, 2Q08 - $0.3B; 3Q08 - $0.8B)Source: Company data
• Oil price fluctuations drove Revenues up Q-o-Q and down Y-o-Y
• High Refining share in crude balance constrained quarterly revenue growth
EBITDA includes the Company’s share in its equity affiliates (Slavneft , Tomskneft, Moscow refinery and Salym Petroleum Development) EBITDASource: Company data
8
Operating Results
9
7,3 7,4 7,7
0,22,2 2,3 2,41,3 1,4
0,2
1,3
1Q09 2Q09 2Q08Ow n Production NIS Slavneft* Tomskneft* Sibir Energy
3,2 3,9 2,5
0,4 0,40,3
3,53,9
4,2
1Q09 2Q09 2Q08
Export Export CIS Domestic
0,80,8
0,8
4,1 3,54,4
1Q09 2Q09 2Q08
Crude export Crude export to CIS Crude domestic
Crude output (MM Tonnes)
11,50.3
Operational Performance
* Production figures include 50% of Slavneft and TomskneftSource: Company data
Crude Oil Sales (MM Tonnes)
Refining (MM Tonnes)
Oil Products Sales (MM Tonnes)
7.0 7.18.2
11,0
4,4 4,9 4,90,6 0,81,7 1,6 1,6
0,8 0,6
1Q09 2Q09 2Q08Omsk NIS Yaroslavl Moscow
(0,9%)3,6% 8,0% 14,1%
(15,7%) (18,9%) 17,1% 15,5%
5.14.3
5.30,2 0,2
7,5 8,1 7,10.8
11,4
10
75
77
79
81
83
85
87
89
Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09
Upstream: core assets daily output is surprising on the upside
Source: Company data
January average –81 282 tonnes/day
June average –82 567 tonnes/day
August average –83 317 tonnes/day
March average –80 273 tonnes/day
11
178
122160171
151
55,451,155,7 53,454,2
2Q08 3Q08 4Q08 1Q09 2Q09Average flow at new wells, Tonnes per day
Number of New Wells Launched*
Sporyshevskoye 5,9%
Others 31,4%Sugmutskoye
13,1%
Priobskoye 24,6%
Krapivinskoye 3,5%
Sutorminskoye 7,8%
Vyngapurovskoye 11,3%
Muravlenkovskoye 2,4%
Muravlenkovskoye 2,3%
Vyngapurovskoye 12,2%
Sutorminskoye 7,7%
Krapivinskoye 3,1% Priobskoye
26,4%
Sugmutskoye 12,1%
Others 30,6%
Sporyshevskoye 5,6%
Oilfield Development
638
434494575524
2Q08 3Q08 4Q08 1Q09 2Q09
2Q091Q09
Production Drilling (Th. Meters)
Gazprom Neft Production by Field*
Source: Company data
*Gazprom Neft data not including its share in equity affiliates (Slavneft , Tomskneft) and NIS
• Quarterly Organic production growth driven by:• Increased drilling• More new wells launched• Improved average flow rate at new wells • Production well stock optimization
• Priobskoye (+13 749 bbl a day) and Vyngayakhinskoye (+3 457 bbl a day) are leaders in terms of quarterly organic extraction growth
12
• Omsk refinery tends to be one of the most technologically advanced in Russia
• High gasoline and light products yield favors Gazprom Neft in case of equalization of export duty for heavy and light products
• Modernization at Moscow refinery is more visible in view of Sibir Energy acquisition
Refineries complexity
Fuel Oil22%
Other15%
Diesel35%
Gasoline28%
Oil Products Slate, % (6M08 and 6M09)
Source: Company data
Refining Conversion Ratio, %
50556065707580859095
100
6M08 9М08 2008 3М09 6М09
Omsk
Moscow
Yanos
2009
2008
3,624
0%10%20%30%40%50%60%70%80%90%
100%3,869
0%10%20%30%40%50%60%70%80%90%100%
+13%
+16%
-29%
Fuel Oil19%
Other20%
Diesel32%
Gasoline29%
Other Gasoline Low-octaine gasoline High-octaine gasoline
13
673777 782
865 896
435
133
31 Dec, 2005 31 Dec, 2006 31 Dec, 2007 31 Dec, 2008 30 Jun, 2009
0,7 0,8 0,7 0,6 0,7
0,30,5 0,4
0,30,4
2Q08 3Q08 4Q08 1Q09 2Q09
Retail network other premium sales*
4,4 4,4 4,1 3,6 4,0
2Q08 3Q08 4Q08 1Q09 2Q09
Oil Products Marketing expansion
Source: Company data
* Other premium sales includes sales of new business units – bunkering, aero fuelling and lubricants business
• Oil products sales through premium channels grew by 22% in 2Q09
• Own retail network (including NIS and Sibir) totaled 1 514 gas stations
Retail – Most Efficient Downstream Segment+15% +1% +11% +4%
+30% -15% -18%
Oil Products Sales in Russia (MM Tonnes)
Oil Products Sales Throughpremium channels (MM Tonnes)
Number of Active Gas Stations
Kirgizia Chelyabinsk region
+40 gas stations
Sales regions
Italy Serbia
Belorussia
Kazakhstan
Khabarovsk
Murmansk
Archangelsk
Ust-Luga
Novorossiysk
Caucasus Harbor
New assets -1H 2009
Bunkering
Airports
1,01,3
1,1 0,91.1
22%
NIS
Sibir
14
Rebranding campaign
Retail – Most Efficient Downstream Segment
• 45 filling stations are operating under new style; rebranding activity is on the way on 43 stations
• In 2009 a new brand is to be introduced at 230 fuelling facilities operating currently under different brands
• By the end of 2011 there will be 1003 gas stations under GazpromNeft brand
15
Financial Results
16
Sales breakdown
Source:Company data
30%
1%29%
0%
4%32%
3%
1%
Revenue Breakdown 1Q09
1Q09 2Q09Total revenues 4 185 5 180 24%Crude export 1 231 1 410 15%Crude CIS 137 209 53%Crude domestic 33 9 (73%)Products export 1 310 1753 (34%)Products CIS 148 172 16%
148519
123
1 18332
111
Change, %
Other 11%
Products domestic 26%Gas sales (41%)
Revenue Breakdown 2Q09
27%
0%29%
2%
3%
35%
4%
0%
Crude Export
Crude CIS
Crude domestic
Products export
Products CIS
Products domestic
Gas
Other
17
Taxes: Gazprom Neft benefited from lagging export duties and reduced MET
Duty lagging effect gaining ground in 2Q08 & 2Q09, $/t Actual MET vs. “OLD” MET, per bbl
• In 2Q09 Gazprom Neft’s export duty payables grew only modestly by 6,9% q-o-q to $623 mln despite strong Urals price growth by 16,6% to $58/bbl as a result of duties calculation lagging effect. Thus in 2Q09 Gazprom Neftwas benefiting from limited duties increase.
• Following MET formula calculation amendment incorporating increased crude threshold price from $9/bbl to $15/bbl effective from January 1, 2009 Gazprom Neft had net benefit of $1,3/bbl for all crude volumes produced domestically both in 2Q09 and 1H09.
0
100
200
300
400
500
600
700
Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09
+/- Actual duty Theoretical duty
$0
$5
$10
$15
$20
$25
$30
Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09
+/- MET Old MET
18
Costs under control
• In 2Q09 most of cost lines declined y-o-y following Ruble devaluation in the beginning of 2009. Upstream operating costs were down by 20% y-o-y to $291 mln. Downstream operating costs were down 10% y-o-y to $136 mln. Transportation cost in 2Q09 reduced only marginally by 1% y-o-y to $428 mln as devaluation effect was diminished by transportation tariffs hikes in the beginning of 2009. SG&A costs were up 20% y-o-y neglecting devaluation effect due to NIS and marketing units consolidation starting from 2009.
• Q-o-Q costs analysis shows Gazprom Neft’s modest cost increase if adjusted for real Ruble appreciation vs. US Dollar of 10.9% in 2Q09.
4,56
6,83
6,00
5,33
5,13
2,242,86
3,182,94
2,55
4,74 4,844,49
4,27
4,67
5,915,24
4,805,15
5,80
2,02,53,03,5
4,04,55,05,5
6,06,57,0
2Q08 3Q08 4Q08 1Q09 2Q09Upstream DownstreamTransportation SG&A
6%17%330282SG&A
1%12%428382Transportation
-5%5%136 129 Downstream2%13%291258Upstream
-1%10%427387Operating:
QoQA*QoQ2Q091Q09
Unit costs dynamics, $/bbl Absolute costs dynamics, $ mln
298
386
123262
385
2Q09A*
A* - adjusted for real Ruble appreciation vs. USD of 10.9% in 2Q09
19
EBITDA is on strong recovery track
32,2%
27,4%
8,3%
22,9%
29,0%
0%
6%
12%
19%
25%
31%
37%
2Q08 3Q08 4Q08 1Q09 2Q09
17,9
11,55,0
32,537,6
0
5
10
15
20
25
30
35
40
2Q08 3Q08 4Q08 1Q09 2Q09
• In 2Q09 Gazprom Neft’s adjusted EBITDA reduced by 53% y-o-y and increased by 57% q-o-q to $1 501 mln.
• Adjusted EBITDA per barrel of production in 2Q09 is down 52% y-o-y and up 52% q-o-q to $17,9/bbl.
• In 2Q09 adjusted EBITDA margin of 29% almost restored its pre-crisis record values.
Adjusted EBITDA MarginAdjusted EBITDA per barrel ($/bbl)
20
806 883 830475 717
63617
191282
1 264
2Q08 3Q08 4Q08 1Q09 2Q09Capex Free cash Flow
+49%
+50%
-61%
$1 498$2 075
-$502
-$1 197
-$2 219
$1 676
$1 665
Consistent Cash Performance
Available Net Cash Flow (US$MM)
• Debt used for refinancing and M&A• Capex financed by operating cash flow• $1.5B of cash remained at end 2Q09
31.12.2008 Operating Cash Flow
Capital Expenditures
Other (Investing Activities)
Debt Net Change
Dividends 30.06.2009
Source: Company data
Operating Cash Flow (US$MM)
$1 717
$52
$1 197
$502
$2 564
$888
$2 000
$219$577
Sources Uses
Operating Activity (excl. Working Capital) Working CapitalCapital Expenditures DividendsDebt Received Debt RepaidInvestment OtherCash Increase/Decrease
Cash Sources and Uses (US$MM), 6m 2009
-21%
1 442
2 147
847666
999
21
• 2Q09 CAPEX is 11% below that in 2Q08 due to Ruble devaluation effect and CAPEX efficiency increase.
• In 2Q09 upstream CAPEX grew only modestly by 9% q-o-q to $399 mln
• In 2Q09 refining CAPEX almost tripled vs. 1Q09 level to $204 mln. due to the acceleration of upgrade programs at the Company’s processing facilities
• In 2Q09 Marketing and Distribution CAPEX more than doubled vs. 1Q09 to $114 mln due to the launch of the wide-spread rebranding program by the Company’s marketing units.
Organic Capex Breakdown
184 175
398181 224
323
72
20443
1144242
1Q09 2Q09 2Q08
Upstream - Brown Fields Upstream - Green Fields Refining Marketing & Distribution
1Q09 2Q09 2Q08$6.9/bbl
$4.6/bbl
$13.5/bbl
Upstream $7.3/bbl $12.6/bbl
Brown Fields $4.4/bbl $9.1/bbl
Green Fields $15.2/bbl $24.1/bbl
Capex Dynamics, $ mln
$806
$480
$717
+49%
-11%
Source: Company data
22
0,00
0,30
0,60
0,90
2006 2007 2008 2Q090%
10%
20%
30%
Net Debt/EBITDA (lhs) Gearing (rhs)
Debt Profile
1 278 1 256
581
219 119
2010 2011 2012 2013 2014
Net Debt/EBITDA, Gearing (%)
Debt Structure as of March 2009, %
Maturity Profile (US$MM)
Source: Company data
Credit Ratings
B-/B3B/B2
B+/B1BB-/Ba3BB/Ba2
BB+/Ba1BBB-/Baa3BBB/Baa2
2003 2004 2005 2006 2007 2009
Investment Grade
S&P Moodys
2008
41%
43%
16%*
Sberbank* Short-termLong-term
91%
9%
Foreign Currency (USD,EUR, RSD)RUR
Net Debt totaled US$ 3,369 *Bridge agreement, that would be refinanced under the long term basis
23
Recent transactions
25
Sibir Energy: Overview
Shares acquisition
In a series of public transactions Gazprom Neft consolidated 54.71% of Sibir Energy
Source: Company data, Public sources
Upstream businessReserves
- 120 MM Tonnes (C1 reserves)
Production
- 4.8 MM Tonnes in 2009E
Downstream business Moscow Refinery
(joint venture with Gazprom Neft )
- 10 MM Tonnes of refining throughput
(capacity 12 MM Tonnes )
- 133 filling stations
- One of the leading position in Moscow and Moscow region market of oil products
54,71%
33,72%
16,94%27,54%
23.04.2009 22.05.2009 17.06.2009 23.06.2009
Gazprom Neft share in Sibir Energy, % (as of)
26
Appendix
27
2Q 2009: Accounting reclassifications and one-offs
Other accounting reclassifications
Moscow Refinery Valuation
Source: Company data
335
805 470
Gain from SibirEnergy acquisition
Fair ValueCarrying Value
As of June 23, Gazprom Neft purchased 55% of Sibir Energy, thus increasing it share in Moscow Refinery to 59% and making it a fully consolidated subsidiary
As per Purchase Price Allocation the Fair Value at Moscow Refinery was estimated at $805 mln
Difference between Carrying value and Fair value in the amount of $470 mln. was recorded as Gain from Sibir Energy acquisition in the Income Statement
2Q 2008
Revenue 9,957 (+146)
Opex
SG&A
Taxes
517 (-10)
265 (-10)
1,545 (+166)
Excise taxGross up
6M 2008
18,002 (+325)Revenue
974 (-21)
439 (-19)
2,859 (+365)
Opex
SG&A
TaxesUnified Social
Tax reclassification
730335
470
1Q09 2Q09
1,200
+258%
Net Income, USD mln.