Bashneft increased IFRS net income by 18.5% in the first half of 2014

Bashneft Group, which comprises JSOC Bashneft, its subsidiaries and affiliates, in the first half of the year received net profit in the amount of 29.8 billion rubles, which is by 18.5 percent more than in the same period of 2013, the oil company reports.

The revenue from sales increased by 18.9 percent - up to 309.8 billion rubles. Adjusted EBITDA increased by 15.9 percent - to 29.5 billion rubles. Improvement in financial performance are explained in the company mainly by increased oil production and petroleum product output combined with a favourable pricing environment.

More than two-fold increase in operating cash flow - from 22.8 billion rubles to 47.1 billion rubles occurred due to changes in the working capital, including prepayment received in the second quarter of 2014 under a long-term contract for supply of petroleum products and amounting to 500 million USD. Under this contract, effective until July 2019, the total volume of deliveries will be at least 3.15 million tons. The price for petroleum products shall be calculated based on current market prices. Prepayment will be returned through physical delivery of petroleum products starting from 2016.

In the first half of the year Bashneft increased capital costs by 31.7 percent, to 18.8 billion rubles. This was due to the growth of investment in the development of R.Trebs and Titov fields in the Nenets Autonomous District, and financing of LLC Burneftegaz, an exploration and production company based in the Tyumen Region and acquired by Bashneft in March 2014.

In the second quarter of the year the Group’s total debt increased by 13.1 percent and amounted to 164.6 billion rubles. Adjusted net debt decreased by 6.1 percent - up to 107.1 billion rubles.

JSOC Bashneft is a vertically integrated oil company operating in the regions of Russia and abroad. According to the results of 2013 it is the sixth largest oil producer (16.1 million tons) and the fourth — in terms of oil primary refining (21.4 million tons) among oil companies in Russia. The main shareholder is Sistema JSFC.