2002 Full Year Financial Results -...
Transcript of 2002 Full Year Financial Results -...
2002 U.S. GAAP Financial Results
Sibneft 2002 Results
Alexander KorsikChief Operating Officer
2002 Operating Highlights
Ø Sibneft crude production was 26.344 mln. tons (536,700 b.p.d.).é 27.4% YoY
Ø Total refining throughput was 15.82 mln. tons (322,300 b.p.d.).é 19.3% YoY
Ø Crude exports were 10.7 mln. tons.é 46.7% YoY
Ø Oil product exports exceeded 3.6 mln.ton. ü including exports from Moscow Refinery
Ø Retail products sales totaled 2.92 mln. tons.é 25% YoY
Ø Retail network grew to 1183 stations by year-end 2002.
Ø Sibneft, in alliance with TNK, won Slavneft privatization auction.
2002 Average Prices
$66.0 / tonFuel Oil$265.8 / tonGasoline A92
$210.5 / tonDiesel$23.5 / barrelUrals
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2002 Financial Highlights
Ø Revenue was $4.777 billion
Ø EBITDA was $1.803 billion
Ø Net profit was $1.161 billion
Ø Capex were $959 million
Ø Declared total dividend payment was $1.093 bln.
ü Dividend payout ratio was 94% of net profit
ü Dividend yield was 13.5%
Ø Two Eurobonds issued totaling $900 mln.
Sibneft 2002 Financials
Olga PokrovskayaDeputy CFO
Income Statement Highlights
1 160 5111 305 274Net income
1 324 5371 439 396Profit before tax
(68 538)34 159Other income and expenses
9 896(729)Minority interest
1 393 0751 405 237EBIT
410 033313 916DD&A
1 803 1081 719 153EBITDA
3 383 6162 170 442Total costs and other deductions
1 205 368702 292Operating expenses
4 776 6913 575 679 Total revenues
4 710 6793 449 145Refined products, oil and gas sales
20022001(thousand USD)
Factors Driving 2002 Financial Results
Ø Factors driving Revenue growth:ü Significantly higher crude oil productionü Growth in exports
ü Higher average world market crude prices
ü Increased volume of products sold
Ø Factors hindering Revenue growth:– Lower average oil product prices
Ø Factors hindering EBITDA growth:– Costs associated with diversification of distribution markets
– Growth in transportation tariffs
– SG&A increase due to Export Duties (adjusted based on crude oil prices)
– Taxes other than Income Tax doubled due to Mineral Extraction Tax
Ø Factors hindering Net Income growth:– DD&A increase due to rapid production growth
– Higher interest paid, due to increased debt position
2002 Revenue Segmental Breakdown
347 217Siboil resale and commission
2911Other oil & gas sales
4 7113 449Total revenues from oil and gas sales
1 5661 487Oil product sales (domestic)
207-Crude sales (domestic and CIS)
722546Oil product exports
1 8401 188Crude exports
20022001(million USD)
Cashflow Highlights
620 87551 649Cash and equivalents at end of year
569 22624 563Change in cash and equivalents
215 25715 653Net cash provided by financing activities
(932 044)(1 302 378)Net cash used in investment activities
1 286 0131 311 288Net cash from operating activities
(6 488)101 363Change in estimated income taxes
411 635(88 366)Change in accounts payable
(610 204)(329 758)Change in net accounts receivable
1 160 5111 305 274Net profit / (loss)
20022001(thousand USD)
Capitalization
7.39%9.53%Weighted average interest rate for period
7.69%9.59%Weighted average interest rate at end of period
37.7%21.6%Net debt / shareholder capital
4 291 5524 036 735Shareholder capital
1 658 079608 333Long-term liabilities
578 715314 864Short-term liabilities
20022001(thousand USD)
Balance Sheet Highlights
7 548 4565 712 796Total liabilities / share capital
4 291 5524 036 735Shareholder capital
-1 682Minority interest
134 173140 661Income and other taxes
706 197294 562Accounts payable and accrued liabilities
1 658 079608 333Long-term debt
578 715314 864Short-term debt
7 548 4565 712 796Total assets
3 853 4123 241 170Net oil and gas properties / PP&E
1 356 787 765 794Accounts receivable
620 87551 649Cash and equivalents
20022001(thousand USD)
2002 Operating Results
Production Growth (2002 YoY, %)
-10.00% 0.00% 10.00% 20.00% 30.00%
Sibneft
Yukos
Surgut
TotalFinaElf
TNK
Rosneft
ENI
Royal Dutch / Shell
BP
Repsol
Lukoil
ExxonMobil
ChevronTexaco
Well Productivity Up, Costs Under Control
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3.76
2.61
1.75 1.71
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2002 Financial Performance Comparison (EBITDA, USD/boe)
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Source: Company data except (*) consensus analyst forecast
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2002 Financial Performance Comparison (net income, USD/boe)
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Source: Company data except (*) consensus analyst forecast
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Dividend Payout Comparison (% of operating cash flow, 2002)
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Royal
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“In our view Sibneft is the best financially managed company in Russia, and arguably one of the leaders worldwide.” – Brunswick UBS
Source: Sibneft data, UBS Warburg
Optimum Upstream/Downstream Balance
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2002
14.2514.114.0Refining: Omsk
4.33.93.4Exports to CIS
40%40%40%% of production
17.015.513.2Exports to world markets
5.04.52.5Moscow
42.538.833.0Production
2.01.00.5Yaroslavl
2005E2004E2003E(mln. tons)
2002 Audited Oil Reserves
Sibneft reports both SPE and SEC classification reserves for 2002.
Proved oil & gas reserves, mln.boe.
4 9034 8974 8874 7182 197Proved
Oil reserves, mln.bbl.
1 546
2 086
4 644
SPE 2000
1 269
2 360
4 646
SPE 2001
1 433
1 990
4 575
SPE 2002
1 934-Possible
2 784-Probable
4 5992 129Proved
SPE 1999
SEC 2002
SPE vs. SEC Reserve Classification: Key Differences
License Terms
Ø The methodology for SEC classification reserves takes into account the timeframe and terms of the production license.
Ø Most fields under production are licensed through 2013 and 2014, and some, like Sporishevskoye and Romanovskoye, until 2022 and 2023.
Reservoir Hydrodynamics
Ø According to SPE, if there is a proven hydrodynamic connection between wells 1 and 2, the “blue” reserves (see diagram) are considered Proved. According to SEC classification only the reserves around each well drainage area are considered Proved, i.e. only the “green”reserves.
Well 1 Well 2
Acquisition Strategy (including Slavneft)
AssetsAssetsAssets
Added value
Added value:FDP, Planning, Technology,
People
Added value
Seller'sUpside
Seller'sUpside
Upside for Sibneft
Company Y Sibneft Company X
We don't buy
We buy!
Putting Sibneft’s Strategy to Work at Slavneft
RESERVOIR MANAGEMENT
PLANNING
TECHNOLOGIESOUTSOURCING OF SERVICES
PEOPLE
Megionneftegas Daily Production (in thousand tons)
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YukosSibneft: a New International Oil Major
Ø The world’s largest proved oil reserves among non-state oil companies
ü 19.6 billion bbl (Sibneft and YUKOS 2002 SPE reserves plus half of 50% Slavneft ABC1 reserves)
Ø Fourth largest non-state oil producer in the world
ü Current production level ~ 2.3 mln. b.p.d.
Ø A major Russian oil refiner, marketer and exporter
ü Refining capacity ~ 1.85 mln. b.p.d.
ü ~ 2500 service stations
Ø Fastest organic growth of any oil major
YukosSibneft: Strategic Rational
Ø Advantages of Scale and Leadershipü Ability to undertake mega-projects in oil and gasü Prospects to improve access to marketsü Opportunities as a global player
Ø Potential synergiesü Sharing best practicesü Optimization of logisticsü Increased leverage with suppliersü Administrative cost optimizationü Other synergies in upstream and downstream
Ø Combination facilitated by similar corporate cultures and shared focus on modernization, efficiency, and value.