Transneft, the world's largest oil pipeline company, has published condensed consolidated financial results under IFRS for 2020 in the For Investors and Shareholders section of its official website.
Key performance results of Transneft Group
The combination of high results in the first 4 months of 2020 and significantly lower indicators starting from 1 May 2020, after OPEC+ deal enacted - under which the Russian Federation assumed obligations to cut down crude oil production - describe the specific features of Transneft’s production and financial results in 2020.
Crude oil transportation in 2020 declined by 42.8 MMT or 9%. Petroleum products transportation remained at the level of the previous year and amounted to 37.9 MMT.
The adjusted revenue of Transneft Group (excluding revenue from sales of commercial oil for export) reduced by RUB 56 billion or 6% mainly due to declining revenues from oil transportation by RUB 42 billion and from stevedoring, additional port services and fleet services by RUB 10 billion. The decisions taken under OPEC+ deal and the COVID-19 pandemic had a major impact on the revenue dynamics.
The revenue shortfall led to a decrease in Transneft Group's EBITDA by RUB 44 billion or 9%, and a decrease in profit attributable to shareholders of Transneft by RUB 46 billion or 26%. The negative impact was partially offset by cutting down operating costs. The fact that most of the costs are semi-fixed works as a significant constraint for the ability to manage the Group's operating costs. Also in 2020, the Company incurred unforeseen operating costs of RUB 2.2 billion due to the aggravation of the epidemiological situation in Russia and globally caused by the spread of new coronavirus infection.
Due to a significant drop in the volume of oil transportation under the OPEC + agreement, the Company took a set of measures aimed at reducing costs and balancing key budget parameters by additional CAPEX reduction and postponement of part of the expenses to later periods.
In November 2020, the Company allocated RUB 84 billion for the 2019 dividends, which is 8.5% higher than the dividends for 2018.
Total debt by the end of 2020 was RUB 590 billion or 8% higher than the same indicator of the previous year. The reduction in the principal debt of Transneft was mainly due to the planned redemption of marketable bonds.
Find below Transneft Group’s key performance indicators in Q4 2020:
For the detailed analysis of the Group’s financial standing and performance as well as its consolidated financial statements in accordance with IFRS for the year ending 31 December 2020, see here and here.