Marketing
Annual report JSOC Bashneft 2013
74
Financial results
Annual report JSOC Bashneft 2013
75
ABOUT
THE COMPANY
OPERATING RESULTS
APPENDICES
CORPORATE GOVERNANCE
INFORMATION FOR
SHAREHOLDERS AND INVESTORS
Wholesale and small wholesale
In 2013, wholesale sales of petroleum products and petro-
chemicals (including small wholesale) totalled 9.2 million
tonnes.
The Group’s branch Bashneft–Regional Sales (previously LLC
Bashneft–Region, a marketing subsidiary) is responsible for
small-scale wholesale distribution of petroleum products.
The unit controls a network of regional sales offices that de-
liver products from the Ufa refineries to more than 30 regions
of Russia.
Bashneft is actively expanding its network of marketing en-
terprises in order to increase small-scale wholesale supplies
of motor fuel in priority regions. These include mostly regions
bordering Bashkortostan, as well as Moscow and St Petersburg,
as themost intensivemarkets in terms of consumption volumes.
In 2013 Bashneft continued development of wholesale chan-
nels. In accordance with the requirements of the Ministry
of Energy and the Federal Antimonopoly Service of Russia,
and in order to improve transparency, petroleum product sales
via the St Petersburg International Mercantile Exchange were
significantly increased. Total sales on the exchange in 2013
came to 960 thousand tonnes of petroleum products.
Oil product exports in 2013
Pipeline
Rail
Ship
98%
13%
69%
2%
87%
31%
0%
20%
40%
60%
80%
100%
Fuel oil
Diesel
Fuel oil
Exports of petroleum products
In 2013, Bashneft exported 9.4 million tonnes of petroleum
products and petrochemicals. More than 90% was sold
to countries outside the Customs Union, mainly to Northern
Europe. Sales to Customs Union countries totalled 0.7 million
tonnes.
The main export product is diesel fuel (53% of supplies). Vac-
uum gas oil and fuel oil also have significant share (19% and
16% respectively).
The Group exported its petroleum and petrochemicals via
OJSC Transnefteprodukt’s system of export pipelines, by rail
to Kazakhstan and European countries, and through ma-
rine terminals to ports in St Petersburg, Vysotsk, Novoros-
siysk and Kaliningrad. It also shipped products at the buyer’s
expense to Europe by road. During the navigating season,
in 2013 fuel oil was shipped from Ufa via water transport.
To organise this, moorings were prepared for handling and
filling.
In 2013, fuel oil was mainly supplied by rail freight (about 69% of the total), and the rest by water. Diesel fuel was transported
by pipeline, and petrol mainly by rail (87%).
Exports of petroleum products and petrochemicals, million
tonnes
2011 2012 2013
Share
in
2013
Diesel fuel
5.3 5.0 4.9 52.7%
Vacuum gas oil
1.9 1.6 1.8 18.7%
Fuel oil
1.0 1.0 1.5 16.0%
High-octane petrol
0.4 0.5 0.7 7.6%
Naphtha
0.4 0.1 0.1 1.3%
Petrochemicals
0.1 0.1 0.1 1.1%
Other
0.1 0.2 0.3 2.7%
Total
9.2 8.6 9.4 100.0%
Financial results
In 2013, Bashneft again delivered a positive financial perfor-
mance. Increases in revenue and EBITDA were driven by or-
ganic growth of oil production, upgrades to production facili-
ties, an increase in the share of production of Euro-4 and Euro-5
fuels, optimisation of the sales structure and implementation
of our strategic goals to simplify the Group’s structure and im-
prove corporate governance.
Despite the weak price dynamics in foreign markets, revenue
increased by 5.8% in 2013 year on year and reached RUB 563
billion, due to higher oil production and refining volumes and
higher domestic prices for petroleum products.
Petroleum products and petrochemicals accounted for the bulk
of revenue, with a 78% share, supporting greater sales margins.
In terms of the geography of petroleum products and petro-
chemicals sales, export and domestic supplies are distributed
in roughly equal proportions, helping to balance price dynamics
in different markets and exchange-rate fluctuations.
Oil sales account for 20% of revenue, comprised mainly of ex-
port sales.
In 2014, we expect the completion of two final projects to sup-
port production of Euro-4 and Euro-5 fuels; further down the
road, by 2018-19 we anticipate completing projects to increase
refining depth, which will help further increase sales of prod-
ucts with high added value.
In absolute terms, EBITDA grew by 2.5%, with an EBITDA mar-
gin of 18%. EBITDA was affected by an increase in non-control-
lable costs in the tax burden, primarily MET and export duties,
due to increase export volumes to countries which are not part
of the Customs Union. It was also affected by higher unit costs
for production related to the expansion of exploration and seis-
mic surveys and the high cost of oil production in the early de-
velopment phase at the Trebs field.
Capital investments remained at the 2012 level and amounted
to RUB 30.4 billion. Development of the Trebs andTitov fields
and upgrade works at refining facilities remain the main items
of capital expenditure.
Capital investments, RUB millions
2013 was a very successful year for
the Company, financially. We demon-
strated robust growth across our fi-
nancial metrics, once again increas-
ing our revenues and net profit, while
lowering our leverage. Our ROACE
reached 24%.
Denis Stankevich
Member of the Management Board,
Vice President, Economics
and Finance – Chief Financial Officer
”
2011
2012
2013
1,027
1,715
30,441
30,789
25,007
2,432
Downstream
Upstream
Other
15,464
15,144
14,298
14,113
8,462
13,582
