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Transneft Publishes Condensed Consolidated Interim Financial Statements for Six Months Ending 30 June 2020

Date of publication: 2 October 2020

Transneft, the world's largest oil pipeline company, has published condensed consolidated interim financial results under IFRS for 2Q 2020 and 1H 2020 in the For Investors and Shareholders section of its official website.

A special characteristic of 1H 2020 was the combination of strong results of 1Q 2020 and a significant reduction in key operational and financial indicators in 2Q 2020 due to a considerable decrease in Russian oil production and, as a consequence, in transportation volumes via the Transneft system in the aftermath of the OPEC+ deal enacted from 1 May 2020.

Find below Transneft Group’s key performance indicators in 2Q 2020:

Crude oil transportation in 2Q 2020 declined by 7.1 mln tonnes, or 6% y-o-y, and by 11.2 mln tonnes or 9% q-o-q and amounted to 109.0 mln tonnes.

Petroleum products transportation in 2Q 2020 declined by 0.2 mln tonnes, or 2% y-o-y, and 1.2 mln tonnes, or 11% q-o-q and amounted to 9.3 mln tonnes.

The revenue of Transneft Group reduced by RUB 32 billion, or 12% y-o-y, mainly due to declining revenues from oil and petroleum products transportation services by RUB 2 billion and from the sales of crude oil and petroleum products by RUB 28 billion. On q-o-q basis, the revenue declined by RUB 35 billion, or 13%, mainly due to declining revenues from oil and petroleum products transportation services by RUB 18 billion and from the export sales of crude oil by RUB 16 billion.

Transneft Group's EBITDA decreased by RUB 2 billion, or 2% y-o-y, and by RUB 18 billion, or 14% q-o-q.

In 2Q 2020, profit was significantly affected by the recognition of the RUB 21 billion impairment loss due to unutilised capacity of separate petroleum products pipelines.

Profit due to the Transneft shareholders amounted to RUB 15 billion, or 73% lower y-o-y and q-o-q.

The total debt as of 30 June 2020 was RUB 638 billion, or 0.2% higher than on 31 December 2019 , and 2% lower than on 31 March 2020.

Due to the decrease in Russian oil production and crude oil transportation via the Transneft system in the aftermath of the OPEC+ deal, the Company plans to implement measures for additional cost reduction and postponement of part of the expenses to later periods. In the medium term, Transneft aims to maintain the same scope of technical revamping and facilities renovation works.

For detailed analysis of the Group’s financial standing and performance as well as its condensed consolidated interim financial statements in accordance with IFRS for six months ending 30 June 2020, see here and here.

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