US GAAP Financial and Operating Results for Third Quarter 2011 8 November 2011
Agenda Alexey Yankevich Highlights, Macro Acting CFO Environment Vadim Yakovlev Upstream Deputy Chairman of the Management Board, First Deputy CEO Vladimir Konstantinov Downstream Head of Economics and Investment Department…
Strong financial performance while advancing on 2020 strategic goals Financial performance in 9M 2011: Revenue: US 32,908 mln (+38.8% Y-o-Y) EBITDA: US 7,704 mln (+49.7% Y-o-Y) Adjusted net Income*: US 4,393 mln (+91.0% Y-o-Y)…
Mixed macro drivers: stabilizing prices and ruble depreciation Brent, /bbl Average exchange rate Inflation (PPI), % Brent, /bbl Average exchange rate Stabilized global crude and product prices Ruble appreciation against US…
Upstream New projects on track, as resource base extension and efficient development of legacy fields continue 88
Sixth straight quarter of production growth Group hydrocarbon production +6% +1% Total Group hydrocarbon production increased 0.7% Crude oil production by equity affiliates increased Q-o-Q and 6.0% Y-o-Y (toe) 1.9% Q-o-Q and…
Operating efficiency backed by industry-leading growth % change in opex/boe 9M Y-o-Y % change in capex/boe 9M11 Y-o-Y - Gas project -Priobsky Power Gas Plant Opex/boe: moderate growth Capex/boe: decreased Energy efficiency…
Strategic acquisitions in new production area Bashkir 9M2011 Results and 2012 Plans Republic Tsarichanskoye Creation of new production cluster in Volga-Urals field region Orenburg processing Orenburg Kapitonovskoye Adds 185…
New projects driving domestic growth: 9M 2011 results and outlook 9 M11 Key Events 2011-12 Major Goals 9 M11 Key Events 2011-12 Major Goals Reactivated & studied 4 wells Began FEED for test Prepared for test Complete asset production…
International projects are on schedule Key events: 2011-2012 Plans: Badrah Completed de-mining Seismic interpretation results due Nov 2011 Completed 3D seismic Planning to drill Nov 2011 Completed construction of cluster sites and…
Downstream Fuel quality upgrades and increases in premium sales add value to industry-leading portfolio 14 14
Refinery modernization raises fuel quality, drives continued premium sales growth 3Q11 Key Events: 2011 Major Goals: Refining Begin construction of isomerization units at Moscow while completing unit Refining volumes up 9% 3Q at…
Higher-value product yield amid increased refining throughputs Gazprom Neft refining throughput Gazprom Neft gasoline and diesel yields (MMTonnes) (MMTonnes) Gasoline Diesel NIS Yaroslavl Moscow Omsk Refinery…
Capitalizing on higher netbacks by channeling crude to domestic refining Gazprom Neft Crude mix Gazprom Neft average netbacks /bbl (MMTonnes) Crude to CIS & Russia Crude Export Refining Refining netbacks remain strong…
High-growth premium channels continue strong performance Y-o-Y 3Q premium* Market share** Geographical expansion: 21 sales increase filling stations in Krasnodar region. Average daily sales per retail site in Russia grew by 35%…
Yaroslavl Refinery modernization continues with launch of Isomalk isomerization unit October 2011 startup of Isomalk isomerization unit (design capacity 650,000 tpa) Isomalk produces high-octane component of commercial gasoline and will…
Financials Strong results on higher volumes and prices 20 20
Financials continue to see strong growth despite quarterly price decline Increased sales volume offset by lower crude and petroleum prices resulted in 0.8% revenue increase Revenues Q-o-Q US mln Average Urals price decreased 2.0%…
Forward rate volatility can cause significant paper losses that will reverse closer to the contract expiration date Profit & Loss FX loss reconciliation, US mln Adj. Net Income reconciliation, US mln Ruble Bond effect = US157 mln…
EBITDA reconciliation Management effectiveness = 798 Changes in Net Price = 1 890 23 23
Operating cash flow boosted due to net income growth Cash flow reconciliation US mln 24 24
Rebranding and improvement program continues to drive capex Capex (US mln) Capital expenditures up Q-o-Q 24.4% due to: 24.4% 9.1% 1 111 58.6% increase in refining capex due to 21 ongoing modernization program 1 018 Significant…
Record Net Debt/EBITDA ratio as a result of commitment to capital discipline and debt optimization Debt ratios and maturity mix Debt by currency Net debt/EBITDA 0.6 vs. target < 1.5 Increased US 600 mln Club Term Loan Share of…
Questions & Answers 27 27
Units bbl barrel boe barrel of oil equivalent tonne metric ton toe tonnes of oil equivalent MMTonnes million tonnes MMbbl million barrels MMboe million barrels of oil equivalent Mmtoe million tonnes of oil equivalent bcm billion…
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