Gazprom Neft Slips into Red on Weak Ruble
Russia's Gazprom Neft booked a net loss of rubles 13.8bn ($194mn) in the first quarter, versus a ruble 108bn profit a year earlier, against a backdrop of weaker oil prices and ruble devaluation.
Revenues were down 12% yr/yr in the three-month period at rubles 515bn, despite a 7.3% growth in production to 184.13mn barrels of oil equivalent/day. Core earnings (adjusted Ebitda) halved to rubles 99.1bn. Despite these weaker numbers, Gazprom Neft noted it continued to generate free cash flow, although it plunged 75% to rubles 22bn, and that its gearing remained low, with a net debt to Ebitda ratio of only 0.88. Over half of its debts are in rubles.
CEO Alexander Dyukov commented that the company was "quick to respond" to the Covid-19 pandemic and the collapse in oil demand, "launching its integrated wide-ranging antivirus programmed aimed at protecting the company and its employees from Covid-19.
"This has made it possible to avoid mass outbreaks at Gazprom Neft facilities, maintain the company's continuous operations and production, and support the regions in which the company operates," he said.
Gazprom Neft is the oil-producing arm of Gazprom, but in recent years it has worked to build up its gas business, incentivised by Opec+ constraints on its oil output and anti-flaring rules. The company produced 379bn ft3 (10.7bn m3) of gas in the first quarter, up 8.8% yr/yr. Oil and condensate production grew by almost 5% to 1.3mn boe/d.