Investor Presentation - Russneft...2013 –2016 Significant decrease of debt burden Glencore debt...
Transcript of Investor Presentation - Russneft...2013 –2016 Significant decrease of debt burden Glencore debt...
Investor Presentation
November 2016
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2
Disclaimer The present Investor presentation contains the information about PJSC OC ”RussNeft” (hereinafter referred to as the “Company” or “RussNeft”) and has been prepared in connection with the possible public offering of the securities
of RussNeft. This Presentation intended to be used for the assistance in the analyzing process by the recipient in relation to RussNeft and has been provided for information purpose only and in connection with the possible public
offering of the securities of RussNeft. This Presentation is not a securities prospect, a decision on issuance of securities, an offer to purchase the securities or some assets or to subscribe the securities or to sell the securities or
some assets, is not an offer or an invitation to make offers, is not an advertisement of securities, guaranty or promise to sell securities or some assets or of the placement of securities or to enter to any contract and shall not be
construed in such capacity.
This Presentation is not a recommendation in relation of the securities of RussNeft or any other securities or some assets described in this Presentation. This Presentation is not to be used for the purpose to become a ground for the
adoption of investment decisions. The information contained herein has been provided by RussNeft and has not been verified by the consultants of RussNeft. This Presentation provided to the recipient for information purpose only
and subject to complete understanding that the present Presentation is to be used only for the purposes described above. The information contained herein may change significantly. This Presentation does not contain the complete
information of RussNeft neccessary for the investigation in relation to RussNeft and developing some conclusion. RussNeft, the possible selling shareholders and the organizators of the offering reserve the right to change any
information contained herein without explaining the reasons at any time in any part and without any notice. The delivery of this Presentation to the recipient does not constitute some obligation of the organizers of the offering, the
possible selling shareholders or RussNeft including the obligation to amend or update this Presentation or to correct the discrepancies. RussNeft, the possible selling shareholders and the organizers of the offering reserve the right to
amend or terminate the offering procedure at any time in any part and without notice. The delivery, contribution or publication of the present Presentation does not constitute any liabilities of making any transactions from the part of
the organizers of the offering, the possible selling shareholders or RussNeft. RussNeft, the possible selling shareholders, the organizers of the offering, their affiliates, employees, officers, representatives, agents, advisors and
consultants do not provide any representations and warranties and do not adopt no liability and no obligation in respect to the fairness, completeness and objectiveness of the information contained herein or in any other written or
spoken information provided to any interested parties or their advisors. The information provided herein is not a ground for some contractual obligation. RussNeft, the possible selling shareholders, the organizers of the offering, their
affiliates, employees, officers, representatives, agents, advisors and consultants are not liable for any direct or indirect losses occurred as a result of use of this Presentation or information contained herein. The information on plans
and any future events is uncertain and may significantly differ from the facts and the events that may arise in future. The person received this Presentation is aware that nothing in the present Presentation constitute the guaranty or
the representation or the warranty or the promise or the obligation in relation to the future events and facts and any future real results, events and facts may significantly differ from the information contained herein. Accordingly
RussNeft, the possible selling shareholders, the organizers of the offering, their affiliates, employees, officers, representatives, agents, advisors and consultants do and will not provide no guaranty, representation, promise or
obligation in relation to the occurrence, fairness, feasibility or achievability of such plans of any future events or facts.
This Presentation contain the forecast information in relation to specific operating rates of RussNeft. In particular, this Presentation contains the information on oil reserves including the oil reserves of the Orenburg assets the
consolidation of which in RussNeft is not finished at the moment.
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OR ANY OTHER JURISDICTION. THE SECURITIES OF RUSSNEFT HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT (1933) AS AMENDED OR UNDER THE LAWS OF ANY STATE AND
MAY NOT BE OFFERED OR SOLD WITHIN THE USA.
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Table of content
Offering Highlights 41
RussNeft Today 72
RussNeft Strategy 123
Investment Highlights 194
RussNeft Financials 305
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Appendix 336
Offering Highlights
4
Issuer Public Joint Stock Oil and Gas Company “Russneft” ( hereafter “Russneft” or “The Company”)
Offer size Up to 20% of ordinary shares
Primary / secondary split 100% secondary
Selling Shareholders BELYRIAN HOLDINGS LIMITED and/or associated and affiliated companies, beneficiary owned by members of the
Gutseriev family
Offering structure Initial Public Offering of ordinary shares on MOEX via bookbuiding mechanism
Listing Ordinary shares are included into the first (highest quotation) list of MOEX
Joint Global Coordinators
and Bookrunners /
Co-lead managers
Joint Global Coordinators and Bookrunners : VTB Capital, Sberbank CIB
Joint Bookrunners: Aton, BCS
Co-lead managers: EFG Asset Management, Investment Company ITInvest
5
Key offering parameters
Type of offering Ordinary shares of PJSC “RussNeft”
Moscow exchange ticker: RNFT
Lock-up period 180 days for the Company, selling shareholder and Glencore
Price range RUB 540 – 600 per share
Bookbuilding period 18 – 24 November 2016
Price announcement /
settlement / start of trading 25 November 2016
6
Offering timetable
BookbuildingAllotment
(deals closing) settlement
Investors submit applications within a stipulated price range during the
period from 10:00 to 19:00 every working day from 18 till 23 November, 24
November from 10:00 to 17:00
During bookbuilding period bidders may submit applications indicating the
price and number of lots, moreover, they may modify or withdraw previously
submitted applications
The seller makes offsetting orders to those which
are to be satisfied, and rejects orders which are
not to be satisfied
Implementation of the settlement through the
transactions clearing concluded in the framework
of proposals
Parameters for Order Submission
Parameter Description
Broker PJSC “MDM Bank” (NC0072800000)
Lot 1 ordinary share
Mechanism Investor might submit applications for purchase of certain number of lots, indicating purchase price
Ticker RNFT (ISIN RU000A0JSE60)
Order submission «Placement: direct orders T0»
Settlement code T0
Other
Regulation of brokerage services and contracts with clients must anticipate possibility of making of client application in the “Placement: directed
orders“
Seller has a right to fulfill order partly or not accept it
Client name should be included in the application, which broker makes on behalf of the client
18 Novaround 10.00
Price range
announcement
25 Novc. 16.00
Start of
trading
25 Nov.around 10.00
Price
announcement
18 – 24 November (inclusive) 25 November
*Moscow time
RussNeft Today
7
0,6
2,3
5,2
6,87,9
Crude oil production (mt)(1)
70
140
193
221
(1) Including international assets in Azerbaijan; (2) Deal completion is expected before 1 April 2017; (3) RussNeft 2P oil reserves, including international assets in Azerbaijan on 100% basis, 2P oil reserves for other companies based on the
latest available data (C1 + C2 oil reserves for Nobel Oil); (4) Interest in the share capital; (5) Calculated as operating profit plus depreciation & amortization adjusted for one-off items; (6) Bloomberg data; (7) Preliminary estimates; (8)
Excluding ilisted independent oil companies; (9) Oil production, excluding international assets in Azerbaijan 8
Overview Key financials (IFRS)
Largest Russian independent
oil company by crude oil production… …As well as 2P reserves
RussNeft at a glance
RUBbn 2013 2014 2015 6M’15 6M’16
Revenue 135 114 105 58 50
EBITDA(5) 27 25 21 14 13
margin, % 20% 22% 20% 24% 26%
EBITDA/production(9) 3.06 2.92 2.84 3.70 3.84
Brent price, US$/bbl(6) 109 99 54 59 41
Net Debt is ca. RUB85bn as of 30 September 2016 (7)
RussNeft is the 6th largest Russian oil company by crude oil production
in Russia (CDU TEK data, excluding subsidiaries and JVs of Russian largest vertically
integrated oil and gas companies)
Total 2P reserves (SPE) as of 2015 exceeded 220 mt(1) with crude oil production in 2015
of 7.9 mt(1)
In October 2016, RussNeft signed a letter of intent with ForteInvest in relation to
acquisition of ForteInvest upstream assets in the Orenburg region with 2P reserves and
crude oil production in 2015 of 14 mt and 0.3 mt respectively
RussNeft strategy assumes significant growth of crude oil production up to 11 mt by
2025 coupled with a sizeable increase in gas production
RussNeft business model is focused on the upstream segment, the Company enjoys
unique experience of operating mature fields and possesses portfolio of assets with
significant growth potential
RussNeft shareholders are the Gutseriev family (75%) and Glencore (25%, the global oil
trader)(4)
Source: CDU TEK, Bloomberg, companies data, Miller & Lents as of 31 December 2015, Miller & Lents report for Tagrinskoye field as of 1 August 2016, Bloomberg, public data
2P reserves 2015 (mmboe)(2)
Notes:
(1) Excluding private oil companies, whose shares are listed
RussNeft history
2006 – 2007
Significant increase in
production drilling
volumes
Further reserve base
growth
Stabilization of oil
production and refining
volumes growth
Successful realization of
production enhancement
operations on mature
fields in Volga Urals
region
Organic growth
2008 – 2009
Realization of cost
savings initiatives
Further increase of
reserve base
(ca. 20 mt)
Growth of retail sales
(ca. 11%)
Anti-crisis program
2010 – 2012
Investment program
expansion (by 60% in
comparison with
2009)
Realization of
exploration program
Further growth in
crude oil production
Expansion
2013 – 2016
Significant decrease of debt
burden
Glencore debt conversion,
Glencore receives a 25%
stake in the share capital of
RussNeft
Successful realization of
gas program (associated
petroleum gas utilization
reached 95%)
Assets portfolio optimisation
2002 – 2005
Successful formation of
reserve base (growth by
70% during 3 years)
RussNeft joins top-10
Russian oil companies by
crude oil production
Commencement of
partnership with Glencore
(including equity
participation in RussNeft
subsidiaries)
Extensive growth
Company business-model
Vertically integrated oil company
Company business-model
Upstream
9
Today RussNeft is the largest private Russian oil company(1)
RussNeft business model is focused on the upstream segment
Successful partnership with Glencore provides RussNeft with access to premium export channels and industry best practices
73%
14%
8%
5%
Notes:
(1) Not including upstream assets of ForteInvest in the Orenburg region 10
Diversified asset portfolio in key oil and gas provinces
West Siberia
Production 2015 2P reserves (SPE)
5.0 mt 162 mtCentral Siberia
Production 2015 2P reserves (SPE)
0.8 mt 18 mt
Volga Urals
Production 2015 2P reserves (SPE)
1.5 mt 30 mt
Moscow
Tomsk
Raduzhnyi
NizhnevartovskKhanty-Mansiysk
Saratov
Ulyanovsk
Penza
Balanced portfolio of upstream assets in key Russian oil provinces as well as international assets in Azerbaijan with significant growth
potential
International assets
Production 2015 2P reserves (SPE)
0.5 mt 11 mt
Azerbaijan
Production breakdown 2015(1)
Reserves breakdown 2015(1)
Total: 7.9 mt
Total (2P SPE): 221 mt
West Siberia
Central Siberia
Volga Urals
Source: Miller & Lents report as of 31 December 2015 , Miller & Lents report for Tagrinskoye field as of 1 August 2016 г, Miller & Lents report for international assets as of 1 January 2016
Orenburg
ForteInvest upstream assets
Production 2015 2P reserves (SPE)
0.3 mt 14 mtInternational assets in Azerbaijan
65%19%
10%
6%
11
Diversification of distribution channels secures the top margins within a dynamic market environment:
- Western Siberia crude oil can be sold both to European and Asian markets
- Volga region assets have a minimal transportation leg to the European market
- Western & Central Siberia crude oil is priced with a premium compared to other Russian oil provinces
Cooperation with Glencore ensures access to premium sales channels, infrastructure and best industry business practices
Long-term contracts with Glencore secure stable cash flows and allows to raise external financing at attractive terms
Russian and CIS markets account for more than 60% of total crude oil sales
Sales channels, distributing 3.53 mt(1) as of 1H 2016
Key highlights
Purchased crude oil
and condensate
5%
Total hydrocarbons
volume sold
100%31%
Belarus market
9%
Export, excl. CIS
31%
Domestic market
60%Other refineries
41%
Gutseriev family
refineries
19%
Crude oil
8%
Processing
1%
Gutseriev family refineries are important counterparties for RussNeft securing
demand in the domestic market
Argus / Kortes based pricing for the agreed quotation period
Long-term contracts with conditions revised upon material market changes
Optimized logistic / transport costs through oil swap contracts with
Gazprom neft
Arm length basis sales contracts
Diversified sales geography
Prepayments at competitive rates account for up to 90% of the total amount of
export contracts
Diversification of sales channels through a processing arrangement
Access to the attractive regional oil products market
Sales in Belarus are fixed price / deferred payments based
Crude oil export contracts are fully prepaid and priced on the basis of Platt’s
quotes based formula with settlement in USD / EUR
Effective marketing channels
Notes:
(1) Excluding international assets and upstream assets of ForteInvest
(2) RussNeft crude oil production, excluding oil losses and own use
Produced crude oil(2)
95%
RussNeft Strategy
12
Application of new technologies allowed RussNeft to reverse production trend
in 2016
1,9
1,6
5,5
5,12016F
7,42015
7,10,4
25%
31%
Crude oil production with tax exemptions from Tagrinskoye /
Verkhne-Shapshinkoye fields
Crude oil production with tax exemptions from RussNeft core assets
Crude oil production without tax exemptions
20,1
18,5
21,6
21
19
17
20
22
18
Jul16Jan 16Jan 15 Jul 15
-13%
+17%19,7
Russneft was not able to launch development
of Achimov deposits of Tagrinskoye field and
AS 12-3-5 reservoir of Verkhne-
Shapshinkoye field before 2015 due to
technological issues
In the second half of 2015 RussNeft
successfully applied multi-stage hydraulic
fracturing, resulting in high initial flows of 70-
150 tons per day. Given significant tax
exemptions development of these fields has a
positive effect on RussNeft return on
investments
In 2016, the Company increased drilling
volumes (plan for Tagrinskoye field assumes
drilling of 74 wells, plan for Verkhe-
Shapshinskoye field assumes drilling of 33
wells)
Drilling of unconventional reserves at
Tagrinskoye and Verkne-Shapshinskoye fields
is the main driver of production levels
maintenance in the medium-term perspective
Production breakdown (mt per year)
Daily crude oil production (ths tons)
Share of tax exempt
oil
- Daily production dynamics, % per year
1 Excluding international assets in Azerbaijan and ForteInvest upstream assets in the Orenburg region 13
LONG-TERM GROWTH
POTENTIAL
MEDIUM-TERM
GROWTH POTENTIAL
CORE ASSETS
Notes:
(1) The amount of capital expenditures for gas production project in Azerbaijan is in discussion (project finance is possible). Natural gas to toe conversion ratio – 0,8 t/1000 bcm. APG is converted to natural gas on the basis of
difference between sale price (4.8 times lower).
Strategic initiatives Production profile in 2017-25 (mtoe)
Involvement of P3 reserves
Vostochno-Kamennoye
Exploration projects
Orenburg assets
Producing assets in Russia
GEA
Sredne-Shapshinskoye
CORE ASSETS
Producing assets in
RussNeft portfolio and
international assets in
Azerbaijan
Maintenance of oil production at current levels on the
back of applying efficient drilling techniques,
sidetracking as well as wellwork techniques
Further implementation of cost savings initiatives
Maintenance of the current level of production under
PSA in Azerbaijan
Growth of gas production, including both natural gas
and associated petroleum gas
MEDIUM-TERM
GROWTH
POTENTIAL
Sredne-Shapshinskoye
field / Orenburg assets /
Achimovs deposits
Development of highly productive Achimovsk
formations at Tagrinskoye field applying multi-stage
fracturing technology
Intensive development of Sredne-Shapshinskoye
field with significant tax exemptions
Realization of synergies with Orenburg upstream
assets on the back of efficient project management
and portfolio optimization
LONG-TERM
GROWTH
POTENTIAL
Vostochno-Kamennoye
field, P3 reserves,
exploration projects and
gas project in Azerbaijan
Development of Vostochno-Kamennoye field
following launch of commercial production at the
assets, securing medium-term growth potential
Development of sizeable P3 reserves at RussNeft
brownfields and prospective areas (exploration
projects) should crude oil prices demonstrate steady
recovery
Development of gas and condensate deposit in
Azerbaijan discovered in 2015
Gas production project in Azerbaijan
Gas production (1)
(1)
–
5,0
10,0
15,0
20,0
25,0
30,0
35,0
0
2
4
6
8
10
12
14
2017 2018 2019 2020 2021 2022 2023 2024 2025
Capital expenditures, RUB bn (RHS)
14
Current strategy assumes significant oil production growth up to
11 mt by 2025 as well as growth in gas production
(1)
Tagrinskoye (Achimovs deposits)
0
Core assets
Strategic initiatives Management projections
Highly profitable
investments to
maintain current
production levels
Development of sizeable P2 reserves should crude oil
prices demonstrate steady recovery
Maintenance of the number of efficient production
enhancement operations at 500 per year
Maintenance of the current level of production under
PSA in Azerbaijan
Intensive new
drilling and
sidetracking
Development of assets with significant tax exemptions
and high flow rates (up to 180 ths tons per day)
Wells development using multi-stage fracturing
technology (4-9 stages)
Implementation of sidetracking program
Drilling of more than 150 wells by 2020
Over 350 sidetracking works by 2025
Implementation
of gas program
Total 2Р gas reserves of 35 bcm, 3P reserves of over
40 bcm
Successful implementation of production enhancement
operations in Western Siberia and Saratov region would
lead to increase in APG and natural gas volumes
Cost
optimization
initiatives
Decrease in drilling costs (reduction potential of
ca.10%)
Personnel costs optimization
Optimization of contractual terms for utilities, increase in
wells interrepair periods, etc.Decrease in cost
of wells
construction
Personnel costs
optimization
Other Total
Cost optimization
program
approved by the
Company’s
President
Cost optimization potential (RUBm per year)
54
125
179
Planned production2017-2025
Remaining 2Р reserves
Total
0,46 0,46 0,57 0,60 0,70 0,64 0,60 0,56 0,54
1,77 1,81 1,76 1,77 1,76 1,74 1,70 1,63 1,58
2017 2018 2019 2020 2021 2022 2023 2024 2025
Natural gas APG
Projected gas sales, bcm
2P reserves(1), mt
15
920-960940-1,040
2,890-3,0701,030-1,070
1 RussNeft + GEA 2P reserves reduced by 7.5 mt of production in 2016 and not including 2P reserves for Sredne-Shapshinskoye, Vostochno-Kamennoye, Achimov deposits at Tagrinskoye
deposit and Orenburg assets
Medium-term growth potential
Strategic initiatives Production profile (mt)
Development of
Achimov deposits
at Tagrinskoye
field
70-150 tons per day flow rates achieved following commencement of drilling atAchimov deposits applying multi-stage fracturing technology in 2016
Sizeable 2P reserves – 15.1 mt with 3P reserves of 20.0 mt
ca. 55 wells and 15 sidetracking operations in 2017-2019. Wells development usingmulti-stage fracturing technology (4-9 stages) with horizontal barrel length of 500-700 m
Tax exemptions due to geological complexity
Annual production is expected to grow up to 1.0 mt by 2019
Highly profitable
development of
Sredne-
Shapshinskoye
field
Key parameters:
2Р reserves – 10.5 mt, 3P reserves – 24.2 mt
High starting flow rates (36 tons per day) as a result of geological endexploration works in 2016
Low drilling costs
MET exemptions (zero MET rate 0%)
Up to 60 exploration wells to be drilled annually reaching with peak production of0,9 mt to be reached in 2021
Peak production of up to 1.5 mt should P3 be confirmed
Commercial viability of horizontal drilling as well as application of multi-stagehydraulic fracturing to be assessed
Realization of
synergies with
Orenburg assets
Key parameters:
5 producing fields with growing production
2Р reserves – 14.2 mt, 3P reserves – 22.4 mt
High initial flow rates - 35-55 tons per day for directional wells, 70-160 tons perday for horizontal wells using multi-stage fracturing technology
Low geological risks
Low transportation costs given proximity to end customers (Orsky oil refinery)
Production volumes of 1.1 mt projected to reached by drilling of up to 40 wells perannum at all fields
0,0
0,5
1,0
1,5
2,0
2017 2018 2019 2020 2021 2022 2023 2024 2025
Production based on 3P reservesProduction based on 2Р reserves
2P scenario assumed
in strategy
0,0
0,5
1,0
1,5
2017 2018 2019 2020 2021 2022 2023 2024 2025
16
0,0
0,5
1,0
2017 2018 2019 2020 2021 2022 2023 2024 2025
Long-term growth potential
Strategic initiatives Management projections
Development of
Vostochno-
Kamennoye field
Key parameters:
2Р reserves – 9.1 mt, 3P reserves – 29.1 mt
Well-studied geology
From 2019, drilling of up to 80 wells annually is assumed
reaching peak of 1.5 mt in 2026
Development of
P3 reserves at
producing field /
exploration
projects
Development of possible reserves
Substantial P3 reserves at producing fields – ca. 86 mt
Production is projected to grow up to 1.0-1.5 mt
annually by 2025 due to the involvement of
prospective areas with P3 reserves
Exploration projects
Additional geological exploration works at 4
prospective areas would ensure additional production
growth of ca.1 mt by 2025
Gas project in
Azerbaijan
Gas and condensate deposits were discovered in 2014
and confirmed in 2015 following drilling of exploration well
Should exploration works prove to be successful, annual
gas production may reach 1-1.5 bcm with potential drilling
of 10 exploration wells with insignificant operating costs
without material taxes
0,0
0,5
1,0
1,5
2017 2018 2019 2020 2021 2022 2023 2024 2025
Exploration
projects3D seismic
Exploration
wells
Production
wells
W. Uzunskiy 2017 2 24
Pikoviy 2018 2 32
Kh-Frolovskiy 2019 7 64
Yasnoye - 2 50
Production profile (mt)
0,0
0,5
1,0
1,5
2017 2018 2019 2020 2021 2022 2023 2024 2025
Production profile (bcm)
171 Including GEA and Orenburg assets; exlcluding Vostochno-Kamennoye deposit
Prospective exploration projects and estimated amount of drilling
Implementation of the Company’s strategy is based on experience and
expertise throughout value chain
Expertise in oil reserves replacement –
one of the highest RRR in the market
Ability to fulfill entire potential by
developing prospective projects
Maintenance of stable cash flows from
producing fields
▪ Effective conversion of P3 reserves into
2P reserves
▪ Proven track record of exploration
– Efficient seismic operations
– Discovery and development of highly
productive oil deposits
ProductionField developmentExploration and appraisal
▪ Launch of commercial production at
large fields in line with initial timeline
and budget
▪ Application of technologies to develop
hard-to-recover reserves
– Experience in achieving high flow
rates using multi-stage fracturing
– Effective implementation of modern
production enhancement
technologies
▪ Effective maintenance of brownfield flow
rates
▪ Successful implementation of production
enhancements
– Well costs control
– 10% increase in labor efficiency in
2015-2016
– Successful implementation of
technological improvements at
certain fields
18
Investment Highlights
19
20
Investment highlights
III
IV
VVIII
VII VI
I
II
Private company focused on increasing
shareholder value
Prerequisites for attractive dividends
policy
High share of tax exempt oil in
production and tax breaks of E&P
segment
Significant reserves base with high
reserves replacement ratio
Robust financials bolstered by stable
cash flows
Substantial production growth potential
from new assets
Balanced shareholding structureExperienced management team and
high standards of corporate governance
183%
167%
(26%)
116%
292%
-50% 0% 50% 100% 150% 200% 250% 300%
162
30
1814
11 235
West Siberia Volga Urals CentralSiberia
ForteInvest Internationalassets
Total 2P
One of the highest reserves-to-production
ratios in the industry
20
19
19
19
16
-23 -18 -13 -8 -3 3
21
One of the highest reserves replacement ratios
in the industry
I. Significant reserves base with high reserves replacement ratio
Notes: Reserves data as of 2015, assuming 100% shareholding(1) ForteInvest producing assets in the Orenburg region to be acquired by 1 April 2017
(2) Excluding the ForteInvest assets and assets in Azerbaijan
(3) Excluding any acquisitions
2P reserves, mt
Source: Company data, Miller & Lents reserves report as of 31 December 2015, Miller & Lents reserves for Tagrinskoye oilfield and Geoprogress (the Orenburg based assets) as of 1 August 2016
Balanced portfolio of producing assets
1P reserves-to-production ratio2 as of 2015, years 2P reserves replacement ratio2 as of 2015
(3)
One of the highest reserves-to-production and reserves replacement ratios among Russian oil &
gas companies
Highly effective geotechnical operations and successful execution of exploration program allow
RussNeft to grow the proved reserves base (1P) replacing continuously at least 100% of an
annual production with new 2P reserves securing a foundation for the future production
Diversified asset portfolio in key oil
provinces of Russia and in Azerbaijan
Significant reserves base upside potential
on the back of an effective exploration
program
(2) (2)
(1)
7,0 6,0 5,2
1,33,2
5,8
7,9 8,39,2
11,0
2015 2017F 2021F 2025F
22
II. Substantial production growth potential from new assets
Source: Company data, Miller & Lents reserves report as of 31 December 2015, Miller & Lents reserves for Tagrinskoye oilfield, Miller & Lents report for assets in Azerbaijan as of 1 January 2016
Core assets Mid-term growth potentialLong-term growth
potential
21 3 41
7.9 mt of crude oil produced in 2015 (3)
Maintaining production levels with new drilling, side-tracking and production
enhancement operations
More than 54 mt of crude oil to be produced in 2017-2025 out of 2P reserves and
3.5 mnt in 2022-2025 out of P3 reserves
More than 124 mt of 2P reserves to be involved into production additionally should
commodity markets demonstrate steady recovery
7
Production growth potential of 1 mnt by 2025 on the back of geological and
exploration works at Khantymansiysko-Frolovsky, Pikovy, West-Uzunsky licensee
areas and Yasny field (1)
4
Current production of 19 ths tonnes
Expected 2P reserves based production peak at 0.9 mnt in 2021
Production to reach a peak of 1.5 mnt should possible reserves be confirmed
5
Acquisition of ForteInvest producing assets to be completed before 1 April 2017
Expected production level of 0.5 mt in 2016, 0.34 mt in 2015
Expected 2Р reserves based peak production of 1.1 mt is expected in 2020
6
Current production of 3 ths tonnes
Field development to start in 2019 with expected production peak of 1.5 mn within
seven years
65
2
1.8 bcm of natural and associated gas were sold in 2015
2.3 bn rubles of gas revenues in 2015
Expected production plateau at 2.7 bcm per annum in 2021
3Р reserves, mtoe
(1) Potential production based on the management expectations
(2) Including production from Sredne-Shapshinskoye and Vostochno-Kamennoye fields, ForteInvest producing assets in the Orenburg region, expected production from exploration projects, development of P3 reserves and an expected production from drilling of the Achimov
deposits at Tagrinskoye field
(3) Including production of RussNeft, excluding Vostochno-Kamennoye, Sredne-Shapshinskoye oilfields and the expected production from drilling of the Achimov deposits on Tagrinskoye oilfield) and production from international assets in Azerbaijan
(4) Excluding gas projects in Azerbaijan
0,5 0,50,7 0,6
1,6 1,9
1,9 1,7
2,0
2,42,7
2,3
2015 2017F 2021F 2025F
Natural gas Associated gas
Oil & gas production outlook
Gas4, bcmOil, mnt
245
20
20
24
Sredne-
Shapshinskoye
Gas
program
2329
Additional
resource
potential1
Tagrinskoye,
Achimov
deposits
Forte
Invest
East-
Kamennoye
Currently
producing
assets
35
7
3 Expected peak production of 1.0 mnt in 2019 on the back of 55 drilled wells and 15
side-tracking jobs completed in 2017-2019
(3)
(2)
Notes:
(1) Operating and capital expenditures
(2) Calculation on the base of LTM EBITDA; net banking debt / EBITDA LTM calculation according to VTB facility agreement
Combined CAPEX and OPEX cost per tonne is 10% lower than the industry
average for Russian oil companies
Cost optimization program in place is aiming to decrease costs by 2.9-3.1 bn
rubles per annum till 2021 on the back of:
Reduction in drilling CAPEX by 10% or 920-960 mn roubles p.a.
Optimization of administrative costs by 20-30% or 940-1 040 mn roubles
p.a.
Service contracts terms improvement and liquidation of non-performing
wells, contributing together 1 030-1 070 mn roubles p.a.
One of the lowest marginal costs (1) per tonne in the Russian Oil &
Gas industry (rub./tonne)Focus on delevereging
III. Robust financials bolstered by stable cash flows
6 315
4 618 4 304 4 149
3 561
-
1 000
2 000
3 000
4 000
5 000
6 000
7 000
8 000
0
1000
2000
3000
4000
5000
6000
7000
8000
Лукойл Башнефть Газпром нефть Русснефть Роснефть
Effective debt management boosted the Company financial standing,
allowing to deleverage its balance sheet securing the Net Debt/EBITDA
ration of 3.1x:
In 2016: a US$1 bn debt conversion into equity
In 2015: a US$1.3 Glencore debt facility repayment
E&P segment as of 2015
Average 4 589 rub. /tonne
Source: Company data
23
Net bank debt/ EBITDA LTM(2) on financial covenants
1,6 1,5 1,9 1,2
3,0
4,5
2,5 1,6
1,6x2,0x
4,3x3,1x
2013 2014 2015 1H 2016Net banking debt Non-banking debt
13% 13%
23% 25%
87% 87%
77% 75%
2012 2013 2014 2015
24
IV. Tax exempt oil in production and tax breaks for E&P segment
Focus on the E&P segment allows the Company to maximize the tax maneuver
advantages to be crystallized in a 4bn RUB p.a. increase in operational cash
flows starting from 2017
7.5% savings in the MET due to the relevant tax breaks as of 2015
Netback is to grow in 2017 due to a decrease in an export duty from 42% to
30% and the corresponding decrease in the weighted-average export duty &
MET tax rate from 61% to 57% in the oil price
Under the tax regime in force, a share of tax breaks in the current oil price is to
grow by 3% by 2021
Note:(1) As of 2015
Share of production from oilfields with tax breaksTax regime
Reduction in MET due to the tax breaks (1), mn RUB
Source: Company data
Production with no tax breaks Production with tax breaks
46 566 1 483 1 072
952 12 43 047
MET Saratovskyblock
Ulyanovskyblock
Nizhnevartovskyblock
Tomskyblock
MET with taxbreaks
7.5% cost optimization of MET due to tax breaks
25
V. Private company focused on increasing shareholder value
Largest Russian private non-public oil company1
7.9 mnt of crude oil produced in 2015(1)
2P reserves of 221(1) mnt and a high reserves-to-production ratio
Regions of operations: Volga Urals, the Orenburg region(2), Western and Central Siberia in Russia and Azerbaijan
High financial discipline with OPEX and CAPEX3
CAPEX and OPEX cost per tonne is 10% lower than the industry average for Russian oil companies
Cost optimization program is in place aiming to decrease costs by 2.9-3.1 bn rubles per annum till 2021 on the back of an optimizing drilling CAPEX,
administrative costs and service contracts terms improvement
Strategic decision making and conservative investment policy coupled with detailed and balanced approach to new acquisitions4
More than 15 years of experience in oil assets consolidation
Recently approved a mid-term Company development strategy
Acquisition of the ForteInvest producing assets is a transaction of a strategic nature for RussNeft. Based on the 1H 2016 results, a positive gain will amount to:
+6% in production, +7% in revenue, +7% in EBITDA
Flexibility and efficiency in decision making with the best interest of shareholders2
Corporate structure conforms to the best international practices
Board of Directors includes non-executive directors – representatives from business and academic circles
Shareholders: the Gutseriev family and Glencore are actively involved in the management of the Company to insure its stable future
Focus on increasing shareholder value as the key point of development5
Dynamic growth of the Company and an effective capital management
Dividends policy complies with the best industry practices of oil & gas companies in Russia
Note:
(1) Excluding producing assets of ForteInvest, expected to be acquired by 1 April 2017
(2) Following the acquisition of ForteInvest producing assets in the Orenburg region
26
15 years of Glencore and RussNeft(1) partnership
VI. Balanced shareholding structure: Gutseriev family and Glencore
Assurance of financial discipline and
shareholder value creation2
Additional source of funding on
flexible competitive terms3
Adherence to the best standards of
corporate governance4
Additional assurance for protection
of minorities5
Access to the premium international
sales channels and best industry
practices1
From 2015 г. – present time
Glencore becomes a shareholder of RussNeft
2002 – 2005
Option for the
buyback of shares
in subsidiaries
Loan to
RussNeft
Control over the
Company by the
Gutseriev family
Gutseriev Family
Control of the Company by the
Gutseriev family and their
partners excluding the period
of 2007 – 2009
42-49%
shares
Loan to
RussNeft
Subsidiaries
51-58%
shares
2005 – 2015Gutseriev Family
46%
shares
54%
shares
01.2016 – 07.2016Gutseriev Family
25%
shares
75%
shares
from 07.2016Gutseriev Family
From 2004 – present time
Exclusive long term export agreement between RussNeft and Glencore
Capital structure
75%
25%
Equity capital
67%
33%
Ordinaryshares
Gutseriev family
294 mn of ordinary and 98 mn of preferred shares in the equity capital of RussNeft
Shareholders of RussNeft are represented by two groups: the Gutseriev family through a number
of legal entities and Glencore, an international trader
Gutseriev family is a selling shareholder at the IPO
Glencore supports the Gutseriev family decision to sell a stake in the Company and backs up
RussNeft to go public
Notes:
(1) The diagram represents share ownership in the equity capital of RussNeft
Corporate structure conforms with the
best practices and fully complies with the
MOEX corporate governance
requirements assigned for the Tier I
quotation list
Board of Directors
– Four non-executive directors
– All of the non-executive directors
approved by the MOEX
– BoD committees are incorporated in
accordance with the MOEX
requirements
IR-department is in charge of
communications with the investment
community
– Application of best information
disclosure practices to commence
an open dialogue with the
investment community and to build
up credibility with investors
27
Corporate structure
VII. Experienced management team and high standards of corporate
governance (1/2)
General Shareholder Meeting
Comments
Corporate Secretary
Internal Audit
Investor Relations
Board of Directors
Mikhail Gutseriev
Chairman of the Board
Oleg Gordeev
First Vice-President, RussNeft
Said Gutseriev
CEO, ForteInvest
Andrey Zarubin
CEO, Neftisa
Alexander Beard
Director, Glencore Energy UK
Vladimir Scherbak
Head of Representative Office,
Glencore Int.
Dmitry Romanov
Vice-President, RussNeft
Audit Committee
Compensation Committee
Andrey Derekh
Chairman of the Board, Investment
company Uniter
Viktor Martinov
Rector of Gubkin Russian State
University of Oil and Gas
Robert Skidelski
Professor, Political Economy at
University of Warwick
Sergei Stepashin
Russian public official
Independent directors
Mikail Shishhanov
President
PAO BINBANK
Sait-Salam Gutseriev
Co-owner of BIN Group
President
Senior Vice-President,
Economics and Finance
28
VII. Experienced management team and high standards of corporate
governance (2/2)
Management of RussNeft
Experience: 38+ years, 10+ years in the Company
Previously: Deputy Director of Federal Energy
Agency, Deputy Minister of Energy of the Russian
Federation
Oleg GordeevFirst Vice-President
Experience: 29+ years,
14+ years in the Company
Previously: Deputy Director of Monetary and
Finance Department of Slavneft
Olga ProzorovskayaSenior Vice-President
for Economics and Finance
Experience: 15+ years,
2 years in the Company
Previously: Chief Geologist of Belkamneft
Mikhail SukhoparovVice-President for Geology and
Development
Experience: 19+ years,
1 year in the Company
Previously: Deputy General Director for
Capital Construction of PAO Belkamneft
Alexandr PermyakovVice-president for Capital
Construction
Experience: 19+ years, 14+ years in the
Company
Ранее: Head of International Business
Department at Slavneft
Magomed-Ali EvloyevVice-President for Commerce
Experience: 20+ years, 6+ years in the
Company
Previously: the director of the Financial
Department at Sistema
Dmitry UstinovVice-President for Finance
Experience: 30+ years, 14+ years in the
Company
Previously: Director for Economy and
Finance at Slavneft
Andrei DokhlovVice-President for Economy and
Budgeting
Experience: 30+ years,
14+ years in the Company
Previously: Head of Corporate Relations
and Assets Management at Slavneft
Dmitry RomanovVice-President for Corporate Relations
Experience: 30+ years,
6+ years in the Company
Previously: Ministry of Internal Affairs of
the Russian Federation
Yuri DubrovskyVice-President for Security
Comments
One of the best
management teams in
the market with a long-
term experience in oil
& gas industry
High focus on
performance
excellence and deep
operational
understanding of
running oil & gas
companies
Proven experience
developing oil & gas
assets with complex
geology and tight
reserves
Source: the Company’s data
Experience: 19+ years,
1 year in the Company
Previously: Senior Vice-president for
Production and Geology
Evgeny TolochekPresident, RussNeft
Experience: 14+ years
Previously: First Deputy General Director
− Chief Engineer at Bashneft-Dobycha
Alexander MalyshevVice-President for Production
29
Comments
VIII. Prerequisites for attractive dividends policy
CAPEX / Cash Flow from Operations (2015)
RussNeft plans to adhere by the best industry practices of oil &
gas companies in Russia
Growing cash flows from operations may allow the Company to
distribute a significant part of the generated cash flow among its
shareholders
Current reduction in debt burden to the Net Debt / EBITDA ratio
of 3.1x provides an additional confidence in the size of dividend
payments
RussNeft intends to reserve not less than 50% of its Net
Income remaining past financing of the investment program and
a repayment of the existing debt for the distribution of dividends
Size of Net Income shall be determined based on the financial
results according IFRS
0,3
0,4
0,7
0,7
0,7
1,2
0,00 0,20 0,40 0,60 0,80 1,00 1,20 1,40Source: Company data
Average: 0.65
RussNeft Financials
30
36 31
(26)
3 8
2013 2014 2015 1H 2015 1H 2016
27 2521
14 13
54
2
1 1
3229
23
15 14
2013 2014 2015 1H 2015 1H 2016
135
114105
5850
109 99
54 59
41
2013 2014 2015 1H 2015 1H 2016
31
Comments Revenue dynamics (RUB bn)
EBITDA(1) dynamics (RUB bn) Net income dynamics (RUB bn)
Financial results
27% 27% (25%) 5% 18%
Revenue reached RUB 50 bn (1H 2016), demonstrating a slight decrease
against 1H2015 despite the fact that Brent price fell by more than 30%
Successful implementation of the operational efficiency program would allow
to increase EBITDA margin in the medium-term
Net loss in 2015 was driven by foreign exchange losses (1H 2016 net income
margin was 10%)
RussNeft accumulated RUB 18 bn of deferred tax assets which will be used
against tax on future earnings bringing a positive effect on net income
Notes:
(1) Calculated as a sum of EBIT, depletion, depreciation and amortization without accounting for nonrecurring items (including foreign exchange differences)
Source: IFRS, BloombergNet income (loss) margin
20%24%
22%26%
20%22%
24%26%
26%29%
Margin (RussNeft)
Margin (incl. GEA)
EBITDA (GEA)
EBITDA (RussNeft)
Brent (US$ per barrel)
Notes:
(1) Includes commercial papers (165,4 mn US$) converted in 2016 in 1 common and 15 683 preferred shares (2) Net banking debt as of June 30 2016 (3) Calculation on the base of LTM EBITDA; net banking debt /
EBITDA LTM calculation according to VTB facility agreement 32
Comments
RussNeft implements successive policy of gradual deleveraging and debt
portfolio optimization:
- Currently 98% of total debt portfolio is a long-term debt
- Due to the restructure completed in 2016 net debt / EBITDA ratio
decreased to 3,1x (net banking debt / EBITDA LTM as of 1H 2016)
- Starting from July 2016 interest rate is determined as 3M LIBOR + 5%
RussNeft debt portfolio historically consisted of foreign currency debt which
had a material impact on debt burden in 2014-2015 because of rouble
devaluation against major currencies
VTB Group is a key lender and long-term partner of the Company
Debt structure
Weighted average interest rate dynamics Financial debt dynamics (US$ bn)
Debt portfolio
Total:
US$1.4 bn(1)
Net banking debt / EBITDA LTM(3) according to financial covenantsSource: IFRS, Company data
(2)
99%
1%
US$ RUB
98%
2%
Non-current debt
Current debt
1,6 1,5 1,9 1,2
3,0
4,5
2,5 1,6
1,6x2,0x
4,3x3,1x
2013 2014 2015 1H 2016
Net banking debt Non-banking debt
6,4%
7,0%
8,4% 8,1%
6,1%
2013 2014 2015 1H 2016 9M 2016
Appendix
33
34
Consolidated statement of profit or loss and other comprehensive
income
Metric, RUB mn 2013(1) 2014 2015 1H 2015 1H 2016
Revenue 135,322 113,503 104,790 58,403 49,955
Cost of sales (96,117) (81,071) (79,237) (40,704) (35,044)
Gross profit 39,205 32,432 25,553 17,699 14,911
Exploration expenses (350) (990) (946) (661) (375)
Commercial expenses (13,758) (10,495) (9,663) (4,938) (4,709)
General and administrative expenses (5,605) (4,525) (4,123) (2,631) (1,679)
Other operating expenses, net (3,949) (5,013) (1,117) (1,139) (797)
Operating profit 15,542 11,409 9,704 8,330 7,351
Finance income 5,510 11,531 21,101 11,036 2,297
Finance costs (11,593) (11,965) (22,561) (10,770) (7,685)
Foreign exchange (loss)/gain 2,898 16,549 (31,671) (1,072) 10,569
Share of loss of joint ventures and associates – (1,012) (2,558) (929) –
Profit before income tax 12,357 26,512 (25,985) 6,595 12,532
Income tax (1,815) 4,864 25 (3,528) (4,062)
Profit for the period from continuing operations 10,542 31,376 (25,960) 3,067 8,470
Discontinued operations
Profit for the period from discontinued operations after income tax 25,606 – – – –
Income/(loss) for the period 36,147 31,376 (25,960) 3,067 8,470
Other comprehensive income
Exchange difference on translation to presentation currency (4,140) (87,616) 49 2,859 390
Total comprehensive (loss)/income for the period 32,007 (56,240) (25,911) 5,926 8,860
Profit/(loss) for the period attributable to
Owners of the company 29,905 30,672 (27,650) 1,703 9,206
Non-controlling interests 6,242 704 1,690 1,364 (736)
Total comprehensive income/(loss) for the year attributable to
Owners of the company 28,982 (56,022) (26,779) 4,526 11,940
Non-controlling interests 3,026 (218) 868 1,400 (3,080)
Notes:
(1) Converted to RUB with an average exchange rate US$/RUB for 2013 of 31,8480 per 1 US$
Source: IFRS
35
Consolidated statement of financial positions (1/2)
Metric, RUB mn 2013(1) 2014 2015 1H 2015 1H 2016
Assets
Non-current assets
Property, plant and equipment 74,586 94,852 99,947 95,374 103,687
Other property, plant and equipment 4,942 4,754 5,107 4,747 4,641
Goodwill 13,552 13,726 13,730 13,726 13,545
Deferred tax assets 6,284 13,164 19,515 10,617 18,223
Exploration and evaluation assets 3,633 44 – 42 –
Other long-term financial assets 2,193 52,464 59,543 93,888 54,322
Investments in joint ventures and related financial assets – 2,361 – 1,431 –
Other non-current assets 491 141 302 292 224
Total non-current assets 105,681 181,506 198,144 220,117 194,642
–
Current assets –
Inventories 5,368 5,949 6,050 6,649 6,575
Trade and other receivables 6,317 5,929 5,082 5,166 5,173
Income tax prepayment 1,015 1,261 820 805 336
VAT prepayment 2,717 1,971 1,792 2,423 2,005
Other current financial assets – 310 – 10 –
Cash and equivalents 1,735 2,063 1,943 1,657 3,049
Other current assets 98 82 31 81 28
Total current assets 17,250 17,565 15,718 16,791 17,166
–
Total assets 122,931 199,071 213,862 236,908 211,808
Source: IFRS
Notes:
(1) Converted to RUB with an 2013 year-end US$/RUB exchange rate of 32,7292 per 1 US$
36
Consolidated statement of financial positions (2/2)
Metric, RUB mn 2013(1) 2014 2015 1H 2015 1H 2016
Equity attributable to owners of the company
Share capital 100 100 100 100 180
Additional paid-in capital – – – – 49,435
Reserve on exchange differences on translation to presentation currency (15,396) (102,090) (2,051) (99) 683
Retained loss (53,053) (22,469) (19,001) (119,771) (23,002)
Total equity attributable to owners of the company (68,349) (124,459) (20,952) (119,770) 27,296
Non-controlling interest 21,653 22,660 (1,680) 23,873 19,186
Total equity (46,696) (101,799) (22,632) (95,897) 46,482
Non-current liabilities
Borrowings 90,824 163,011 175,716 279,724 90,323
Deferred tax liabilities 4,869 5,366 5,546 5,359 5,927
Decommissioning provisions 2,618 2,967 4,973 3,932 8,239
Other non-current liabilities 65 135 1 6 –
Total non-current liabilities 98,376 171,479 186,236 289,021 104,489
–
Current liabilities
Borrowings 6,153 87,764 3,221 2,666 12,655
Trade and other payables 57,603 34,881 41,191 32,505 41,376
Tax payable (except for income tax) 7,397 6,098 5,000 8,203 6,621
Income tax payable 33 90 8 39 5
Other current liabilities 65 558 838 371 180
Total current liabilities 71,251 129,391 50,258 43,784 60,837
Total equity and liabilities 122,931 199,071 213,862 236,908 211,808
Source: IFRS
Notes:
(1) Converted to RUB with an 2013 year-end US$/RUB exchange rate of 32,7292 per 1 US$
Consolidated statement of cash flows (1/2)
Metric, RUB mn 2013(1) 2014 2015 1H 2015 1H 2016
Cash flows from operating activities
Profit from continuing operations before income tax 12,357 26,512 (25,985)
Profit from discontinued operations before income tax 25,701
Profit before tax 38,058 26,512 (25,985) 6,595 12,532
Adjustments for:
Depletion, depreciation and amortization 7,994 9,533 10,581 5,699 5,423
Loss (profit) on disposal of property, plant and equipment (159) (9) 59 42 141
Goodwill impairment 1,656 – – – –
Impairment of financial investments – 23 35 14 71
Impairment / (reversal of an impairment loss) of property, plant and equipment (796) 4,561 566 864 (40)
Impairment of exploration and evaluation assets – – – – –
Change in provisions 159 (141) (361) (243) 153
Gain from bargain purchase – (236) – – –
Loss of joint ventures and associates – 1,012 2,558 929 –
Gain of disposal of subsidiary (15,287) 4 – – 183
Finance income (5,510) (11,531) (21,101) (11,036) (2,297)
Finance costs 11,593 11,965 22,561 10,770 7,685
Foreign exchange difference (2,898) (16,549) 31,671 1,072 (10,569)
Other operating expenses (622) (1,154) 494 (384) 9
Operating cash inflows before working capital adjustments 34,141 23,990 21,078 14,322 13,291
Working capital adjustments
Change in inventories (318) 403 84 (690) (705)
Decrease in trade and other receivables 223 3,059 1,305 84 (477)
Increase in trade and other payables 1,688 9,185 5,329 (1,607) (1,590)
Decrease in other current assets – 133 54 (15) 10
Income tax paid (6,370) (2,537) (1,155) (326) (786)
Net cash flows (used in)/from operating activities 29,364 34,233 26,695 11,768 9,743
Notes:
(1) Converted to RUB with an average exchange rate US$/RUB for 2013 of 31,8480 per 1 US$
Source: IFRS
37
Consolidated statement of cash flows (2/2)
Metric, RUB mn 2013(1) 2014 2015 1H 2015 1H 2016
Cash flows from investing activities
Payments for acquisition of property, plant and equipment (16,147) (16,147) (10,077) (5,262) (5,449)
Proceeds from disposal of property, plant and equipment 223 143 103 7 51
Acquisition of subsidiaries, net of cash (2,643) (1,941) (933) (356) –
Acquisition of associates and joint-ventures, net of cash – – – – –
Proceeds from disposals of subsidiaries 62,836 – – – –
Loans provided (2,102) (8,556) (37,321) (37,229) (18)
Loans received – 174 75,050 – 26
Interests received 733 544 14,178 – –
Net cash used in investing activities 42,899 (25,783) 41,000 (42,840) (5,390)
Cash flows from financing activities
Share repurchases by subsidiaries from non-controlling shareholders (382) (113) (5,488) (8) –
Proceeds from loans and borrowings 54,715 1,672 136,466 115,125 48,869
Repayments of loans and borrowings (120,768) (4,371) (184,068) (79,769) (46,346)
Interest paid (7,389) (6,465) (15,089) (5,659) (4,452)
Dividends to non-controlling equity (32) (34) (13) – 0
Net cash generated from/(used in) financing activities (73,856) (9,311) (68,192) 29,689 (1,929)
Effect of exchange rate changes on cash and cash equivalents (64) 1,189 377 977 (1,318)
Net decrease in cash and cash equivalents (1,656) 328 (120) (406) 1,106
Cash and cash equivalents at the beginning of the period 3,344 1,735 2,063 2,063 1,943
Cash and cash equivalents at the end of the period 1,735 2,063 1,943 1,657 3,049
Notes:
(1) Converted to RUB with an average exchange rate US$/RUB for 2013 of 31,8480 per 1 US$
Source: IFRS
38