Source - RNS
RNS Number : 3569I
PJSC LukOil
29 August 2016
 

 

 

PJSC LUKOIL

 

 

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

 

 (prepared in accordance with IFRS)

 

As of and for the three and six-month periods ended 30 June 2016

(unaudited)

 

 

These condensed interim consolidated financial statements were prepared by PJSC LUKOIL in accordance with IFRS and have not been audited by our independent auditor. If these condensed interim consolidated financial statements are audited in the future, the audit could reveal differences in our consolidated financial results and we can not assure that any such differences would not be material.

 

 

Auditors' Report on Review of Condensed Interim Consolidated Financial Statements

To the Shareholders and Board of Directors

PJSC LUKOIL

Introduction

We have reviewed the accompanying consolidated statement of financial position of PJSC LUKOIL (the "Company") and its subsidiaries (the "Group") as at 30 June 2016, and the related consolidated statements of profit or loss and other comprehensive income for the three- and six-month periods ended 30 June 2016 and the related consolidated statements of changes in equity and cash flows for the six - month period ended 30 June 2016, and notes to the condensed interim consolidated financial statements (the "condensed interim consolidated financial statements"). Management is responsible for the preparation and presentation of these condensed interim consolidated financial statements in accordance with International Financial Reporting Standard IAS 34 Interim Financial Reporting. Our responsibility is to express a conclusion on these condensed interim consolidated financial statements based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A review of condensed interim consolidated financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed interim consolidated financial statements as at 30 June 2016, and for the three -and six-month periods ended 30 June 2016 are not prepared, in all material respects, in accordance with International Financial Reporting Standard IAS 34 Interim Financial Reporting.

 

 

 

Oussov A.I.

Director, power of attorney dated 16 March 2015 No. 18/15

JSC "KPMG"

29 August 2016

Moscow, Russian Federation

 

 

 

PJSC LUKOIL

Consolidated Statement of Financial Position                                                                                                                                    

(Millions of Russian rubles)




30 June
2016 (unaudited)

 

31 December


Note


2015

Assets





Current assets





Cash and cash equivalents

6


346,703

257,263

Accounts receivable, net

7


388,706

440,489

Other current financial assets



16,970

23,768

Inventories

8


388,783

340,196

Income tax prepaid



15,668

7,413

Other taxes receivable

9


67,009

81,692

Other current assets

10


61,063

62,826

Total current assets



1,284,902

1,213,647

Property, plant and equipment

12


3,380,811

3,411,153

Investments in associates and joint ventures

11


169,047

181,744

Other non-current financial assets

13


106,424

102,067

Deferred income tax assets



27,018

28,735

Goodwill and other intangible assets



47,416

51,749

Other non-current assets



30,853

31,512

Total non-current assets



3,761,569

3,806,960

Total assets



5,046,471

5,020,607

Liabilities and equity





Current liabilities





Accounts payable

14


424,715

394,339

Short-term borrowings and current portion of long-term debt

15


132,097

60,506

Income tax payable



6,990

11,640

Other taxes payable

17


93,545

73,277

Provisions

19


27,168

25,553

Other current liabilities

18


114,141

129,853

Total current liabilities



798,656

695,168

Long-term debt

16


732,582

799,207

Deferred income tax liabilities



234,943

234,107

Provisions

19


55,019

51,115

Other non-current liabilities



8,027

9,636

Total non-current liabilities



1,030,571

1,094,065

Total liabilities



1,829,227

1,789,233

Equity

20




Share capital



1,151

1,151

Treasury shares



(241,615)

(241,615)

Additional paid-in capital



129,508

129,403

Other reserves



66,791

104,150

Retained earnings



3,254,923

3,229,379

Total equity attributable to PJSC LUKOIL shareholders



3,210,758

3,222,468

Non-controlling interests



6,486

8,906

Total equity



3,217,244

3,231,374

Total liabilities and equity



5,046,471

5,020,607

 

 

 

 

 

 

 

Vice-president of

PJSC LUKOIL


Acting Vice-president - Chief accountant of

PJSC LUKOIL

Fedotov G.S.


Kozyrev I.A.

 

 

 

 

The accompanying notes are an integral part of these condensed interim consolidated financial statements.

 

 

PJSC LUKOIL

Consolidated Statement of Profit or Loss and Other Comprehensive Income

(Millions of Russian rubles, unless otherwise noted)


Note

For the three months ended
30 June 2016

(unaudited)

For the three months ended
30 June 2015

(unaudited)

For the six months ended
30 June 2016

(unaudited)

For the six months ended
30 June 2015

(unaudited)

Revenues






Sales (including excise and export tariffs)

28

1,338,959

1,476,966

2,516,633

2,917,271

Costs and other deductions






Operating expenses


(113,709)

(105,828)

(226,953)

(211,509)

Cost of purchased crude oil, gas and products


(677,297)

(777,640)

(1,215,030)

(1,477,705)

Transportation expenses


(77,665)

(68,377)

(164,364)

(147,162)

Selling, general and administrative expenses


(45,302)

(40,028)

(93,125)

(81,213)

Depreciation, depletion and amortization


(71,608)

(87,058)

(155,956)

(165,521)

Taxes other than income taxes


(118,724)

(141,219)

(202,277)

(271,054)

Excise and export tariffs


(113,820)

(123,609)

(228,769)

(296,458)

Exploration expenses


(2,871)

(13,586)

(4,552)

(14,783)

Profit from operating activities


117,963

119,621

225,607

251,866

Finance income

22

3,511

4,036

7,342

8,567

Finance costs

22

(11,098)

(11,026)

(21,469)

(22,486)

Equity share in income of affiliates


3,425

2,382

5,778

6,475

Foreign exchange loss


(28,945)

(29,154)

(74,323)

(23,479)

Other expenses

23

(4,205)

(2,784)

(7,548)

(8,556)

Profit before income taxes


80,651

83,075

135,387

212,387

Current income taxes


(17,183)

(19,394)

(27,659)

(42,334)

Deferred income taxes


(774)

575

(2,064)

(1,358)

Total income tax expense


(17,957)

(18,819)

(29,723)

(43,692)

Profit for the period


62,694

64,256

105,664

168,695

Profit for the period attributable to non-controlling interests


(127)

(508)

(272)

(916)

Profit for the period attributable to

PJSC LUKOIL shareholders


62,567

63,748

105,392

167,779







Other comprehensive income (loss), net of income taxes






Items that may be reclassified to profit or loss:






Foreign currency translation differences for foreign operations


(21,923)

(8,045)

(37,314)

(35,641)

Items that will never be reclassified to profit or loss:






Remeasurements of defined benefit liability / asset of pension plan


13

336

33

652

Other comprehensive loss


(21,910)

(7,709)

(37,281)

(34,989)

Total comprehensive income for the period


40,784

56,547

68,383

133,706

Total comprehensive income for the period attributable to non-controlling interests


(119)

(511)

(298)

(967)

Total comprehensive income for the period attributable to PJSC LUKOIL shareholders


40,665

56,036

68,085

132,739













Earnings per share of common stock attributable to PJSC LUKOIL shareholders

(in Russian rubles):






Basic

20

87.76

89.42

147.83

235.34

Diluted

20

87.76

88.13

147.83

231.28

 

 

The accompanying notes are an integral part of these condensed interim consolidated financial statements.

 

 

PJSC LUKOIL

Consolidated Statement of Changes in Equity (unaudited)

(Millions of Russian rubles)

 


Share capital

Treasury

shares

Equity-linked notes

Additional

paid-in

capital

Other reserves

Retained earnings

Total equity attributable to PJSC LUKOIL shareholders

Non-controlling
 interests

Total

equity

31 December 2015

1,151

(241,615)

-

129,403

104,150

3,229,379

3,222,468

8,906

3,231,374

Profit for the period

-

-

-

-

-

105,392

105,392

272

105,664

Other comprehensive income:










Foreign currency translation differences

-

-

-


(37,340)

-

(37,340)

26

(37,314)

Remeasurements of defined benefit liability / asset of pension plan

-

-

-

-

33

-

33

-

33

Total comprehensive income (loss)





(37,307)

105,392

68,085

298

68,383

Dividends on common stock

-

-

-

-

-

(79,848)

(79,848)

-

(79,848)

Changes in non-controlling interests

-

-

-

105

(52)

-

53

(2,718)

(2,665)

30 June 2016

1,151

(241,615)

-

129,508

66,791

3,254,923

3,210,758

6,486

3,217,244

 

 

 

 

 

31 December 2014

1,151

(158,615)

(83,000)

128,846

93,454

3,055,542

3,037,378

12,164

3,049,542

Profit for the period

-

-

-

-

-

167,779

167,779

916

168,695

Other comprehensive income:










Foreign currency translation differences

-

-

-

-

(35,692)

-

(35,692)

51

(35,641)

Remeasurements of defined benefit liability / asset of pension plan

-

-

-

-

652

-

652

-

652

Total comprehensive income (loss)





(35,040)

167,779

132,739

967

133,706

Dividends on common stock

-

-

-

-

-

(70,957)

(70,957)

-

(70,957)

Changes in non-controlling interests

-

-

-

2,339

-

-

2,339

(3,717)

(1,378)

30 June 2015

1,151

(158,615)

(83,000)

131,185

58,414

3,152,364

3,101,499

9,414

3,110,913

 

 

The accompanying notes are an integral part of these condensed interim consolidated financial statements.

 

 

PJSC LUKOIL

Consolidated Statement of Cash Flows

(Millions of Russian rubles)



Note

For the six

months ended

30 June 2016

(unaudited)

For the six

months ended

30 June 2015

(unaudited)

Cash flows from operating activities





Profit for the period attributable to PJSC LUKOIL shareholders


105,392

167,779

Adjustments for non-cash items:





Depreciation, depletion and amortization



155,956

165,521

Equity share in income of affiliates, net of dividends received



(3,839)

65

Dry hole write-offs



522

13,668

Loss on disposals and impairments of assets



4,718

8,251

Income tax expense



29,723

43,692

Non-cash foreign exchange loss



70,506

21,211

Non-cash investing activities



(69)

(161)

Finance income



(7,342)

(8,567)

Finance costs



21,469

22,486

Bad debt provision



2,913

821

All other items - net



6,374

8,510

Changes in operating assets and liabilities:





Trade accounts receivable



2,458

69,459

Inventories



(87,849)

(54,162)

Accounts payable



85,588

(24,766)

Other taxes



37,183

57,356

Other current assets and liabilities



(49,754)

(75,076)

Income tax paid



(35,788)

(38,373)

Dividends received



2,102

-

Interests received



4,215

5,389

Net cash provided by operating activities



344,478

383,103

Cash flows from investing activities





Acquisition of licenses



(2,408)

(371)

Capital expenditures



(248,664)

(302,853)

Proceeds from sale of property, plant and equipment



624

1,219

Purchases of financial assets



(13,299)

(2,924)

Proceeds from sale of financial assets



5,651

5,504

Sale of subsidiaries, net of cash disposed



1,414

2,718

Sale of equity method affiliates



-

9,410

Acquisitions of subsidiaries, net of cash acquired



-

(272)

Acquisitions of equity method affiliates



(1,833)

(3,299)

Net cash used in investing activities



(258,515)

(290,868)

Cash flows from financing activities





Proceeds from issuance of short-term borrowings



46,941

71,559

Principal repayments of short-term borrowings



(12,178)

(26,447)

Proceeds from issuance of long-term debt



89,276

19,402

Principal repayments of long-term debt



(14,050)

(94,255)

Interest paid



(23,574)

(18,190)

Dividends paid on Company common shares



(46,324)

(40,934)

Dividends paid to non-controlling interest shareholders



(1,587)

(767)

Financing received from non-controlling interest shareholders



48

61

Sale of non-controlling interests



-

9

Purchases of non-controlling interests



(1,285)

-

Net cash provided by (used in) financing activities



37,267

(89,562)

Effect of exchange rate changes on cash and cash equivalents



(33,790)

(19,429)

Net increase (decrease) in cash and cash equivalents



89,440

(16,756)

Cash and cash equivalents at beginning of period



257,263

169,023

Cash and cash equivalents at end of period


6

346,703

152,267

 

 

The accompanying notes are an integral part of these condensed interim consolidated financial statements.

 

 

PJSC LUKOIL

Notes to Condensed Interim Consolidated Financial Statements (unaudited)

(Millions of Russian rubles, unless otherwise noted)

 

Note 1. Organization and environment

 

The primary activities of PJSC LUKOIL (the "Company") and its subsidiaries (together, the "Group") are oil exploration, production, refining, marketing and distribution. The Company is the ultimate parent entity of this vertically integrated group of companies.

 

The Group was established in accordance with Presidential Decree No. 1403, issued on 17 November 1992. Under this decree, on 5 April 1993, the Government of the Russian Federation transferred to the Company 51% of the voting shares of fifteen enterprises. Under Government Resolution No. 861 issued on 1 September 1995, a further nine enterprises were transferred to the Group during 1995. Since 1995, the Group has carried out a share exchange program to increase its shareholding in each of the twenty-four founding subsidiaries to 100%.

 

From formation, the Group has expanded substantially through consolidation of its interests, acquisition of new companies and establishment of new businesses.

 

In July 2015, the Company changed its legal form to Public Joint Stock Company ("PJSC") following the requirements of the amended Russian Civil Code.

 

Business and economic environment

 

The accompanying condensed interim consolidated financial statements reflect management's assessment of the impact of the business environment in the countries in which the Group operates on the operations and the financial position of the Group. The future business environments may differ from management's assessment.

 

Note 2. Basis of preparation

 

Statement of compliance

 

The condensed interim consolidated financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting. These condensed interim consolidated financial statements should be read in conjunction with the Group's consolidated financial statements for 2015 prepared in accordance with International Financial Reporting Standards ("IFRS").

 

Selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in financial position and performance of the Group since the last consolidated financial statements for 2015.

 

The accompanying condensed interim consolidated financial statements and notes thereto have not been audited by independent auditors, except for the consolidated statement of financial position at 31 December 2015.

 

The condensed interim consolidated financial statements were authorised by the Vice-president of the Company on 29 August 2016.

 

Functional and presentation currency

 

The functional currency of each of the Group's consolidated companies is the currency of the primary economic environment in which the company operates. Management has analysed factors that influence the choice of functional currency and has determined the functional currency for each Group company. For the majority of them the functional currency is the local currency. The functional currency of the Company is the Russian ruble ("RUB").

 

The presentation currency of the consolidated financial statements of the Group is the RUB. All financial information presented in the RUB has been rounded to the nearest million, except when otherwise indicated.

 

The results and financial position of Group companies whose functional currency is different from the presentation currency of the Group are translated into presentation currency using the following procedures. Assets and liabilities are translated at period-end exchange rates, income and expenses are translated at rates which approximate actual rates at the date of the transaction. Resulting exchange differences are recognised in other comprehensive income.

 

Note 3. Summary of significant accounting policies

 

The accounting policies adopted in the preparation of these condensed interim consolidated financial statements are consistent with those applied and disclosed in the consolidated financial statements for 2015.

 

Note 4. Use of estimates and judgments

 

Preparation of the consolidated financial statements in accordance with IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from those estimates.

 

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.

 

Critical judgments in applying accounting policies that have the most significant effect on the amounts recognised in the consolidated financial statements are the following:

 

·     Estimation of oil and gas reserves;

·     Estimation of useful lives of property, plant and equipment;

·     Impairment of non-current assets;

·     Assessment of asset retirement obligations;

·     Assessment and recognition of provisions and contingent liabilities;

·     Assessment of deferred income tax assets and liabilities;

·     Determination of whether a joint arrangement is a joint venture or a joint operation.

 

Note 5. Income taxes

 

Operations in the Russian Federation are subject to a Federal income tax rate of 2.0% and a regional income tax rate that varies from 13.5% to 18.0% at the discretion of the individual regional administration. The Group's foreign operations are subject to taxes at the tax rates applicable to the jurisdictions in which they operate.

 

The Group's effective income tax rate for the periods presented differs from the statutory income tax rate primarily due to domestic and foreign tax rate differences and the incurrence of costs that are either not tax deductible or only deductible to a certain limit. Tax expense is recognised based on the management's best estimate of the weighted-average annual income tax rate expected for the full financial year multiplied by the pre-tax income of the interim reporting period.

 

The Company and its Russian subsidiaries file income tax returns in Russia. A number of Group companies in Russia are paying income tax as a consolidated taxpayers' group ("CTG"). This allows taxpayers to offset taxable losses generated by certain participants of a CTG against taxable profits of other participants of the CTG.

 

Note 6. Cash and cash equivalents

 


30 June

31 December



2016

2015

Cash held in RUB


34,135

98,253

Cash held in US dollars


283,745

141,863

Cash held in other currencies


28,823

17,147

Total cash and cash equivalents


346,703

257,263

 

Note 7. Accounts receivable, net

 


30 June

31 December



2016

2015

Trade accounts receivable (net of allowances of 17,967 million RUB and
17,322 million RUB at 30 June 2016 and 31 December 2015, respectively)


356,223

375,531

Other current accounts receivable (net of allowances of 1,929 million RUB and 1,599 million RUB at 30 June 2016 and 31 December 2015, respectively)


32,483

64,958

Total accounts receivable, net


388,706

440,489

 

Note 8. Inventories

 


30 June

31 December



2016

2015

Crude oil and petroleum products


323,763

275,941

Materials for extraction and drilling


21,327

21,345

Materials and supplies for refining


3,237

3,732

Other goods, materials and supplies


40,456

39,178

Total inventories


388,783

340,196

 

Note 9. Other taxes receivable

 


30 June

31 December



2016

2015

VAT and excise tax recoverable


36,936

39,171

Export duties prepaid


10,108

21,824

Other taxes prepaid


19,965

20,697

Total other taxes receivable


67,009

81,692

 

Note 10. Other current assets

 


30 June

31 December



2016

2015

Advance payments


25,681

16,341

Prepaid expenses


25,910

31,960

Other assets


9,472

14,525

Total other current assets


61,063

62,826

 

Note 11. Investments in associates and joint ventures

 

Carrying value of investments in associates and joint ventures:



Ownership, %



Name of the company

Country

30 June

2016

31 December

2015

30 June

2016

31 December

2015

Joint Ventures:






Tengizchevroil

Kazakhstan

5%

5%

90,752

99,843

Caspian Pipeline Consortium

Kazakhstan

12.5%

12.5%

25,590

27,574

Turgai Petroleum

Kazakhstan

50%

50%

1,763

1,675

Shakh-Deniz Midstream

Azerbaijan

10%

10%

22,246

22,284

Associates:






Other associates




28,696

30,368

Total




169,047

181,744

 

Note 12. Property, plant and equipment


Exploration

and production

Refining, marketing

and distribution

Other

Total

Cost





1 January 2016

3,232,673

1,206,252

103,587

4,542,512

Additions

203,974

28,882

1,041

233,897

Capitalised borrowing costs

4,694

211

-

4,905

Disposals

(5,845)

(17,437)

(516)

(23,798)

Foreign currency translation differences

(138,021)

(48,226)

(1,825)

(188,072)

Other

(4,215)

6,171

338

2,294

30 June 2016

3,293,260

1,175,853

102,625

4,571,738

Depreciation and impairment





1 January 2016

(953,254)

(259,515)

(14,627)

(1,227,396)

Depreciation for the period

(106,474)

(43,491)

(3,058)

(153,023)

Impairment loss

-

(78)

-

(78)

Disposals

1,209

9,486

268

10,963

Foreign currency translation differences

77,554

16,444

404

94,402

Other

(83)

(1,893)

(11)

(1,987)

30 June 2016

(981,048)

(279,047)

(17,024)

(1,277,119)

Advance payments for property, plant and equipment





1 January 2016

94,619

1,280

138

96,037

30 June 2016

85,300

776

116

86,192

Carrying amounts





1 January 2016

2,374,038

948,017

89,098

3,411,153

30 June 2016

2,397,512

897,582

85,717

3,380,811

 

 


Exploration

and production

Refining, marketing

and distribution

Other

Total

Cost





1 January 2015

2,556,173

1,030,097

95,392

3,681,662

Additions

225,859

63,104

1,646

290,609

Acquisitions through business combinations

305

149

-

454

Capitalised borrowing costs

171

503

-

674

Disposals

(18,740)

(1,459)

(535)

(20,734)

Foreign currency translation differences

(12,907)

(39,808)

(228)

(52,943)

Other

3,465

(3,765)

(63)

(363)

30 June 2015

2,754,326

1,048,821

96,212

3,899,359

Depreciation and impairment





1 January 2015

(444,128)

(142,713)

(8,525)

(595,366)

Depreciation for the period

(131,721)

(30,136)

(2,960)

(164,817)

Disposals

707

3,473

116

4,296

Foreign currency translation differences

4,465

8,951

196

13,612

Other

(1,597)

(489)

(42)

(2,128)

30 June 2015

(572,274)

(160,914)

(11,215)

(744,403)

Advance payments for property, plant and equipment





1 January 2015

58,558

8,258

467

67,283

30 June 2015

74,812

2,397

510

77,719

Carrying amounts





1 January 2015

2,170,603

895,642

87,334

3,153,579

30 June 2015

2,256,864

890,304

85,507

3,232,675

 

The cost of assets under construction included in Property, plant and equipment was 615,890 million RUB and 676,908 million RUB at 30 June 2016 and 31 December 2015, respectively.

 

Exploration and evaluation assets:

 


For the six months ended

For the six months ended


30 June 2016

30 June 2015

1 January

52,302

46,906

Capitalized expenditures

15,317

11,567

Reclassified to development assets

(3,633)

(8,036)

Charged to expenses

(483)

(69)

Foreign currency translation differences

(1,160)

-

Other movements

(127)

18

30 June

62,216

50,386

 

Note 13. Other non-current financial assets

 



30 June

2016

31 December

2015

Long-term loans


94,188

89,770

Non-current accounts and notes receivable


8,326

8,148

Other non-current financial assets


3,910

4,149

Total other non-current financial assets


106,424

 

 

 

 

Note 14. Accounts payable

 


30 June

31 December



2016

2015

Trade accounts payable


374,177

339,091

Other accounts payable


50,538

55,248

Total accounts payable


424,715

394,339

 

Note 15. Short-term borrowings and current portion of long-term debt

 


30 June

31 December



2016

2015

Short-term borrowings from third parties


60,096

33,611

Short-term borrowings from related parties


5,063

5,609

Current portion of long-term debt


66,938

21,286

Total short-term borrowings and current portion of long-term debt


132,097

60,506

 

Short-term borrowings from third parties include amounts repayable in US dollars of 46,960 million RUB and 22,951 million RUB and amounts repayable in other currencies of 13,136 million RUB and 10,660 million RUB at 30 June 2016 and 31 December 2015, respectively. The weighted-average interest rate on short-term borrowings from third parties was 4.36% and 5.43% per annum at 30 June 2016 and 31 December 2015, respectively. Approximately 78% of total short-term borrowings from third parties at 30 June 2016 are secured by inventories.

 

Note 16. Long-term debt

 


30 June

31 December



2016

2015

Long-term loans and borrowings from third parties


436,448

408,781

Long-term borrowings from related parties


-

138

6.356% non-convertible US dollar bonds, maturing 2017


32,129

36,441

3.416% non-convertible US dollar bonds, maturing 2018


96,124

108,983

7.250% non-convertible US dollar bonds, maturing 2019


38,442

43,583

6.125% non-convertible US dollar bonds, maturing 2020


64,173

72,778

6.656% non-convertible US dollar bonds, maturing 2022


32,129

36,441

4.563% non-convertible US dollar bonds, maturing 2023


96,124

108,983

Capital lease obligations


3,951

4,365

Total long-term debt


799,520

820,493

Current portion of long-term debt


(66,938)

(21,286)

Total non-current portion of long-term debt


732,582

 

Long-term loans and borrowings

 

Long-term loans and borrowings from third parties include amounts repayable in US dollars of 303,751 million RUB and 336,842 million RUB, amounts repayable in euros of 61,379 million RUB and 70,447 million RUB, amounts repayable in other currencies of 1,318 million RUB and 1,492 million RUB at 30 June 2016 and 31 December 2015, respectively, and amounts repayable in RUB of 70,000 million RUB at 30 June 2016. This debt has maturity dates from 2016 through 2028. The weighted-average interest rate on long-term loans and borrowings from third parties was 5.32% and 3.77% per annum at 30 June 2016 and 31 December 2015, respectively. A number of long-term loan agreements contain certain financial covenants which are being met by the Group. Approximately 15% of total long-term loans and borrowings from third parties at 30 June 2016 are secured by shares of an associated company, export sales and property, plant and equipment.

 

Note 17. Other taxes payable

 


30 June

31 December



2016

2015

Mineral extraction tax


37,069

24,566

VAT


26,173

21,532

Excise tax


18,996

15,553

Property tax


4,400

4,583

Other taxes


6,907

7,043

Total other taxes payable


93,545

73,277

 

Note 18. Other current liabilities

 


30 June

31 December



2016

2015

Advances received


28,906

79,424

Dividends payable


81,907

47,615

Other


3,328

2,814

Total other current liabilities


114,141

129,853

 

Note 19. Provisions

 


Asset retirement

obligation

Provision for employee compensations

Provision for environmental liabilities

Pension provisions

Provision for compensated absences

Other provisions

Total

30 June 2016

33,466

24,279

5,244

7,630

4,944

6,624

82,187

Incl.:   Non-current

31,707

12,679

3,057

6,132

66

1,378

55,019

           Current

1,759

11,600

2,187

1,498

4,878

5,246

27,168

31 December 2015

32,919

19,837

5,455

7,913

3,591

6,953

76,668

Incl.:   Non-current

32,632

6,733

3,575

6,392

134

1,649

51,115

           Current

287

13,104

1,880

1,521

3,457

5,304

25,553

 

Assets retirement obligation:

 


For the six months ended

30 June 2016

For the six months ended

30 June 2015

1 January

32,919

19,604

Provisions made during the period

1,816

255

Reversal of provisions

(38)

(172)

Provisions used during the period

(44)

(47)

Accretion expense

1,117

430

Changes in estimates

40

(370)

Foreign currency translation differences

(2,157)

(266)

Other

(187)

78

30 June

33,466

19,512

 

Note 20. Equity

 

Common shares


30 June

2016

31 December

2015



(thousands

of shares)

(thousands

of shares)

Authorized common shares, par value of 0.025 RUB each


850,563

850,563

Issued common shares, par value of 0.025 RUB each


850,563

850,563

Treasury shares


(137,630)

(137,630)

Outstanding common shares


712,933

712,933

 

Dividends

 

At the annual shareholders' meeting on 23 June 2016, dividends for 2015 were approved in the amount of 112.00 RUB per common share. At the extraordinary shareholders' meeting on 16 December 2015, interim dividends for 2015 were approved in the amount of 65.00 RUB per common share. Total dividends for 2015 were approved in the amount of 177.00 RUB per common share. At the annual shareholders' meeting on 25 June 2015, dividends for 2014 were approved in the amount of 94.00 RUB per common share. At the extraordinary shareholders' meeting on 12 December 2014, interim dividends for 2014 were approved in the amount of 60.00 RUB per common share. Total dividends for 2014 were approved in the amount of 154.00 RUB per common share.

 

Dividends on the Company's shares payable of 80,114 million RUB and 46,609 million RUB are included in "Other current liabilities" in the consolidated statement of financial position at 30 June 2016 and 31 December 2015, respectively.

 

Earnings per share

 

The calculation of basic and diluted earnings per share was as follows.

 


For the three months ended

30 June 2016

For the three months ended 30 June 2015

For the six months ended 30 June 2016

For the six months ended

30 June 2015

Profit for the period attributable to PJSC LUKOIL shareholders

62,567

63,748

105,392

167,779

Add back interest and accretion on 2.625% convertible
US dollar bonds, maturing 2015 (net of tax at effective rate)

-

697

-

1,718

Total diluted profit for the period attributable to

PJSC LUKOIL shareholders

62,567

64,445

105,392

169,497

Weighted average number of outstanding common shares (thousands of shares)

712,933

754,866

712,933

754,866

Equity-linked notes

-

(41,933)

-

(41,933)

Weighted average number of common shares

(thousands of shares)

712,933

712,933

712,933

712,933

Add back treasury shares held in respect of convertible debt (thousands of shares)

-

18,291

-

19,945

Weighted average number of common shares,

assuming dilution (thousands of shares)

712,933

731,224

712,933

732,878

Earnings per share of common stock attributable to
PJSC LUKOIL
shareholders (RUB):





Basic

87.76

89.42

147.83

235.34

Diluted

87.76

88.13

147.83

231.28

 

Note 21. Personnel expenses

 

Personnel expenses were as follows.


For the three months ended 30 June 2016

For the three months ended 30 June 2015

For the six months ended 30 June 2016

For the six months ended

30 June 2015

Salary

35,137

31,718

69,852

60,582

Statutory insurance contributions

7,394

6,825

14,994

13,644

Share-based payments

2,400

(557)

6,344

3,585

Total personnel expenses

44,931

37,986

91,190

77,811

 

 

Note 22. Finance income and costs

 

Finance income was as follows.

 


For the three months ended 30 June 2016

For the three months ended 30 June 2015

For the six months ended 30 June 2016

For the six months ended

30 June 2015

Interest income from deposits

1,354

2,494

2,849

4,914

Interest income from loans

1,819

1,363

3,697

2,915

Other finance income

338

179

796

738

Total finance income

3,511

4,036

7,342

8,567

 

Finance costs were as follows.

 


For the three months ended 30 June 2016

For the three months ended 30 June 2015

For the six months ended 30 June 2016

For the six months ended

30 June 2015

Interest expenses

10,259

9,576

20,184

20,567

Accretion expenses

751

123

1,124

442

Other finance expenses

88

1,327

161

1,477

Total finance costs

11,098

11,026

21,469

22,486

 

Note 23. Other income and expenses

 

Other income was as follows.

 


For the three months ended 30 June 2016

For the three months ended 30 June 2015

For the six months ended 30 June 2016

For the six months ended

30 June 2015

Gain on disposal of assets

176

1,761

916

2,750

Changes in estimates of asset retirement obligation

9

156

29

258

Reversal on impairment of assets

-

3

-

296

Other income

3,939

3,790

7,779

6,573

Total other income

4,124

5,710

8,724

9,877

 

Other expenses were as follows.

 


For the three months ended 30 June 2016

For the three months ended 30 June 2015

For the six months ended 30 June 2016

For the six months ended

30 June 2015

Loss on disposal of assets

2,825

4,688

5,170

6,127

Impairment loss

356

189

464

5,170

Charity expenses

3,926

2,299

6,343

3,705

Other expenses

1,222

1,318

4,295

3,431

Total other expenses

8,329

8,494

16,272

18,433

 

 

Note 24. Operating lease

 

At 30 June 2016 and 31 December 2015, Group companies had commitments primarily related to the lease of vessels and petroleum distribution outlets. Commitments for minimum rentals under these leases are payable as follows.

 


30 June

31 December



2016

2015

Less than a year


31,215

35,858

1-5 years


49,069

46,589

More than 5 years


87,845

80,924

Total


168,129

163,371

 

Note 25. Commitments and contingencies

 

Capital commitments

 

At 30 June 2016, capital commitments of the Group relating to construction and acquisition of property, plant and equipment are evaluated as 471,866 million RUB.

 

Taxation environment

 

The taxation systems in the Russian Federation and other emerging markets where Group companies operate are relatively new and are characterised by numerous taxes and frequently changing legislation, which is often unclear, contradictory, and subject to interpretation. Often, differing interpretations exist among different tax authorities within the same jurisdictions and among taxing authorities in different jurisdictions. Taxes are subject to review and investigation by a number of authorities, who are enabled by law to impose severe fines, penalties and interest charges. In the Russian Federation a tax year remains open for review by the tax authorities during the three subsequent calendar years. However, under certain circumstances a tax year may remain open longer. Recent events within the Russian Federation suggest that the tax authorities are taking a more assertive position in their interpretation and enforcement of tax legislation. Such factors may create substantially more significant taxation risks in the Russian Federation and other emerging markets where Group companies operate, than those in other countries where taxation regimes have been subject to development and clarification over long periods.

 

The tax authorities in each region may have a different interpretation of similar taxation issues which may result in taxation issues successfully defended by the Group in one region being unsuccessful in another region. There is some direction provided from the central authority based in Moscow on particular taxation issues. The Group has implemented tax planning and management strategies based on existing legislation at the time of implementation. The Group is subject to tax authority audits on an ongoing basis, as is normal in the Russian environment and other republics of the former Soviet Union, and, at times, the authorities have attempted to impose additional significant taxes on the Group. Management believes that it has adequately met and provided for tax liabilities based on its interpretation of existing tax legislation. However, the relevant tax authorities may have differing interpretations and the effects on the consolidated financial statements, if the authorities were successful in enforcing their interpretations, could be significant.

 

Litigation and claims

 

On 27 November 2001, Archangel Diamond Corporation ("ADC"), a Canadian diamond development company, filed a lawsuit in the Denver District Court, Colorado against AO Arkhangelskgeoldobycha ("AGD"), a Group company, and the Company (together the "Defendants"). ADC alleged that the Defendants interfered with the transfer of a diamond exploration license to Almazny Bereg, a joint venture between ADC and AGD. ADC claimed compensatory damages of $1.2 billion (77.1 billion RUB) and punitive damages of $3.6 billion (231.3 billion RUB). On 15 October 2002, the District Court dismissed the lawsuit for lack of personal jurisdiction. This ruling was upheld by the Colorado Court of Appeals on 25 March 2004. However, on 21 November 2005, due to a procedural error, the Colorado Supreme Court remanded the case to the Colorado Court of Appeals and the Colorado Court of Appeals remanded the case to the District Court. On 20 October 2011, the Denver District Court dismissed all claims against the Company for lack of jurisdiction. On 23 August 2012, the Colorado Court of Appeals affirmed this decision. On 1 July 2013, the Colorado Supreme Court denied ADC's Petition for Writ of Certiorari. The case in the state court is therefore over.

 

On 6 January 2012, ADC filed a lawsuit in the US District Court for the District of Colorado (federal court) reasserting almost identical claims asserted in the aforementioned lawsuit and dismissed by the Denver District Court (state court). In the federal Court case, the Company has filed a Motion to Dismiss. On 18 December 2014, the federal court granted the motion based on lack of personal jurisdiction over the Company and the doctrine of "forum non conveniens". ADC filed a notice of appeal in the US Court of Appeals for the Tenth Circuit. On 9 February 2016, the US Court of Appeals for the Tenth Circuit affirmed the dismissal of the case on "forum non conveniens" grounds. On 23 February 2016, ADC filed a Petition for rehearing and for "rehearing en banc". On 1 April 2016, the US Court of Appeals for the Tenth Circuit denied both ADC'c Petition for rehearing and for "rehearing en banc". On 28 July 2016, ADC filed a Petition for Writ of Certiorari. The Company plans to seek dismissal of the case and vigorously defend the matter. Management does not believe that the ultimate resolution of this matter will have a material adverse effect on the Group's financial position.

 

In June 2014, the prosecutors with the Ploesti Court of Appeals (hereinafter the "Prosecutor's Office") issued an order on initiation of criminal proceedings and brought charges against PETROTEL-LUKOIL S.A. refinery, a Group company, and its general director based on alleged tax evasion and money laundering. Later the Prosecutor's Office added bad faith use of the company's credit and money laundering charges for 2008-2010 against LUKOIL Europe Holdings B.V., a Group company. The amount of the claim is not finalised. LUKOIL LUBRICANTS EAST EUROPE S.R.L., LUKOIL ENERGY & GAS ROMANIA S.R.L., Group companies, and a number of Romanian legal entities not affiliated with the Group are also considered to be suspects in this criminal case. At the moment a preliminary investigation of the criminal case is being conducted. Tax audits of PETROTEL-LUKOIL S.A. have not revealed any material violations so far. In July 2015, a new charge in respect of bad faith use of the company's credit and money laundering was brought against the general director and several officers of PETROTEL-LUKOIL S.A. A similar charge was brought against LUKOIL Europe Holdings B.V. and PETROTEL-LUKOIL S.A. for 2011-2014. On 3 August 2015, the Prosecutor's Office issued the final indictment on the new charges and submitted the case to the Prahova Tribunal for further consideration by the preliminary chamber judge. The allegations of bad faith use of the company's credit in respect of PETROTEL-LUKOIL S.A. were excluded from the final indictment. Following the preliminary hearing the Prosecutor's Office revised the amount of damage claimed from $2.2 billion (141.4 billion RUB) to $1.5 billion (96.4 billion RUB). This amount is not final. During the entire trial it may be revised by the Tribunal on the basis of evidence produced. On 15 December 2015, the Prahova Tribunal ascertained that there are numerous irregularities in the indictment act and returned the criminal file to the Prosecutor's Office. The solution was confirmed by the Ploesti Court of Appeal on 19 January 2016. However, the Prosecutor has prepared a new indictment act based on the same accusations which were submitted to the Prahova Tribunal on 22 January 2016. On 18 April 2016, the preliminary hearing chamber of the Prahova Tribunal decided on the hearing of the case on the merits. Moreover, on 10 May 2016, the Prahova Tribunal lifted all preventive measures that were in effect against the accused individuals. At the current stage of the hearings the defendants are making oral statements. Next hearing on the merits will take place on 22 September 2016. Management of PETROTEL-LUKOIL S.A. and its tax and legal counsel are actively defending the lawful rights and interests of the refinery, provide all required opinions, clarifications and comments, and prepare an exhaustive set of evidence to fully rebut the charges brought by the Prosecutor's Office. Management does not believe that the outcome of this matter will have a material adverse effect on the Group's financial position.

 

LUKOIL Overseas Karachaganak B.V., a Group company, among other contractors, is involved in the dispute related to cost recovery and calculation of the "fairness index" in accordance with the Final Production Sharing Agreement in respect of the Karachaganak field in Kazakhstan. An estimated total of claims filed by the Republic of Kazakhstan is about $1.8 billion (115.7 billion RUB), a share of LUKOIL Overseas Karachaganak B.V. is about $243 million (15.6 billion RUB). At the moment the parties are negotiating an amicable settlement of this dispute. Management does not believe that the ultimate resolution of this matter will have a material adverse effect on the Group's financial position.

 

The Group is involved in various other claims and legal proceedings arising in the normal course of business. While these claims may seek substantial damages against the Group and are subject to uncertainty inherent in any litigation, management does not believe that the ultimate resolution of such matters will have a material adverse impact on the Group's operating results or financial condition.

 

Political situation

 

Political and economic situation in Ukraine remained unstable during 2015-2016. Though the Group's assets and operations in Ukraine are not material, the Group monitors the situation and assesses the risks associated with its operations in Ukraine.

 

In July-September 2014, the United States ("US"), the European Union ("EU") and other countries imposed a set of economic sanctions on Russia, including certain sectoral sanctions which affect Russian oil and gas companies. Such sectoral sanctions prohibit US and the EU companies and individuals from providing, exporting, or reexporting directly or indirectly, goods, services (except for financial services), or technology in support of exploration or production for deepwater, Arctic offshore or shale projects on the territory of the Russian Federation. The Company considers these sanctions in its activities, continuously monitors them and analyses the effect of the sanctions on the Company's financial position and results of operations.

 

The Group is exposed to political, economic and legal risks due to its operations in Iraq. Management monitors the risks associated with the projects in Iraq and believes that there is no adverse effect on the Group's financial position that can be reasonably estimated at present.

 

Note 26. Related party transactions

 

In the rapidly developing business environment in the Russian Federation, companies and individuals have frequently used nominees and other forms of intermediary companies in transactions. The senior management of the Company believes that the Group has appropriate procedures in place to identify and properly disclose transactions with related parties in this environment and has disclosed all of the relationships identified which it deemed to be significant. Related party sales and purchases of oil and oil products were primarily to and from associated companies.

 

 

Outstanding balances with related parties were as follows.


30 June

31 December



2016

2015

Accounts receivable


9,097

10,925

Other financial assets


100,069

98,538

Total assets


109,166

109,463

Accounts payable


8,538

8,458

Loans and borrowings


5,063

5,747

Total liabilities


13,601

14,205

 

Related party transactions were as follows.


For the three months ended 30 June 2016

For the three months ended 30 June 2015

For the six months ended 30 June 2016

For the six months ended

30 June 2015

Sales of oil and oil products

5,453

8,452

9,834

16,035

Other sales

452

382

846

741

Purchases of oil and oil products

22,297

16,335

35,442

33,513

Other purchases

461

1,392

2,685

3,435

Loans given

4,105

1,350

12,529

1,869

Loans received

1,548

8,537

2,238

11,333

 

Note 27. Compensation plan

 

In December 2012, the Company introduced a compensation plan available to certain members of management for the period from 2013 to 2017, which is based on assigned shares and provides compensation consisting of two parts. The first part represents annual bonuses that are based on the number of assigned shares and amount of dividend per share. The payment of these bonuses is contingent on the Group meeting certain financial KPIs in each financial year. The second part is based upon the Company's common shares appreciation from 2013 to 2017, with rights vesting after the date of the compensation plan's termination. The number of assigned shares is approximately 19 million shares.

 

For the first part of the share plan the Group recognised a liability based on expected dividends and number of assigned shares. The second part of the share plan was also classified as liability settled. The reporting date fair value of this part of the plan was estimated at 15,711 million RUB, using the Black-Scholes-Merton option-pricing model. The fair value was estimated assuming a risk-free interest rate of 9.53% per annum, an expected dividend yield of 7.08% per annum, an expected time to maturity of two years and a volatility factor of 14.99%. The expected volatility factor for the annual weighted average share price was estimated based on the historical volatility of the Company's shares for the previous ten years from 2006 till 2015.

 

Related to this share plan the Group recognised 2,400 million RUB of compensation expenses during the three months ended 30 June 2016, 557 million RUB of income during the three months ended 30 June 2015, 6,344 million RUB and 3,585 million RUB of compensation expenses during the six months ended 30 June 2016 and 2015, respectively. At 30 June 2016 and 31 December 2015, amounts of 16,042 million RUB and 9,698 million RUB related to this plan are included in "Provisions" of the consolidated statement of financial position, respectively.

 

At 30 June 2016, there was 4,713 million RUB of total unrecognized compensation cost related to unvested benefits. This cost is expected to be recognized periodically by the Group up to December 2017.

 

Note 28. Segment information

 

The Group has the following operating segments - exploration and production; refining, marketing and distribution; corporate and other business segments. These segments have been determined based on the nature of their operations. Management on a regular basis assesses the performance of these operating segments. The exploration and production segment explores for, develops and produces primarily crude oil. The refining, marketing and distribution segment processes crude oil into refined products, purchases, sells and transports crude oil and refined petroleum products, refines and sells chemical products, produces steam and electricity, distributes them and provides related services. The corporate and other business operating segment includes activities of the Company and businesses beyond the Group's traditional operations.

 

Geographical segments are based on the area of operations and include two segments: Russia and International.

 

EBITDA is a supplemental non-IFRS financial measure used by management to evaluate segments performance. EBITDA is defined as profit before interest, income taxes, depreciation and amortisation.

 

Operating segments

 

For the three months ended 30 June 2016

 


Exploration

and production

Refining,

 marketing and distribution

Corporate

and other

Elimination

Consolidated

Sales and other operating revenues






Third parties

42,485

1,288,758

7,716

-

1,338,959

Inter-segment

382,814

15,782

12,457

(411,053)

-

Total revenues

425,299

1,304,540

20,173

(411,053)

1,338,959

Operating expenses

67,355

59,393

5,063

(18,102)

113,709

Selling, general and administrative expenses

9,957

30,866

12,858

(8,379)

45,302

Profit (loss) for the period  attributable to PJSC LUKOIL shareholders

67,519

24,299

(28,071)

(1,180)

62,567

EBITDA

134,701

50,192

(26,532)

1,358

159,719

Income tax expense





(17,957)

Finance income





3,511

Finance costs





(11,098)

Depreciation, depletion and  amortisation





(71,608)

Profit for the period attributable to PJSC LUKOIL shareholders





62,567

 

For the three months ended 30 June 2015

 


Exploration

and production

Refining,

 marketing and distribution

Corporate

and other

Elimination

Consolidated

Sales and other operating revenues






Third parties

64,659

1,405,223

7,084

-

1,476,966

Inter-segment

444,413

13,120

16,758

(474,291)

-

Total revenues

509,072

1,418,343

23,842

(474,291)

1,476,966

Operating expenses

63,017

44,414

5,424

(7,027)

105,828

Selling, general and administrative expenses

9,841

30,251

9,034

(9,098)

40,028

Profit (loss) for the period  attributable to PJSC LUKOIL shareholders

63,312

22,766

(21,885)

(445)

63,748

EBITDA

159,295

44,460

(23,595)

(3,545)

176,615

Income tax expense





(18,819)

Finance income





4,036

Finance costs





(11,026)

Depreciation, depletion and  amortisation





(87,058)

Profit for the period attributable to PJSC LUKOIL shareholders





63,748

 

For the six months ended 30 June 2016

 


Exploration

and production

Refining,

 marketing and distribution

Corporate

and other

Elimination

Consolidated

Sales and other operating revenues






Third parties

95,462

2,400,709

20,462

-

2,516,633

Inter-segment

693,546

31,983

25,906

(751,435)

-

Total revenues

789,008

2,432,692

46,368

(751,435)

2,516,633

Operating expenses

133,623

104,645

9,524

(20,839)

226,953

Selling, general and administrative expenses

19,976

66,697

24,903

(18,451)

93,125

Profit (loss) for the period  attributable to PJSC LUKOIL shareholders

117,994

56,211

(68,727)

(86)

105,392

EBITDA

261,611

109,991

(66,422)

18

305,198

Income tax expense





(29,723)

Finance income





7,342

Finance costs





(21,469)

Depreciation, depletion and  amortisation





(155,956)

Profit for the period attributable to PJSC LUKOIL shareholders





105,392

 

For the six months ended 30 June 2015


Exploration

and production

Refining,

 marketing and distribution

Corporate

and other

Elimination

Consolidated

Sales and other operating revenues






Third parties

126,470

2,777,380

13,421

-

2,917,271

Inter-segment

867,940

27,680

28,600

(924,220)

-

Total revenues

994,410

2,805,060

42,021

(924,220)

2,917,271

Operating expenses

126,479

87,242

10,808

(13,020)

211,509

Selling, general and administrative expenses

20,088

60,740

19,022

(18,637)

81,213

Profit (loss) for the period  attributable to PJSC LUKOIL shareholders

137,754

62,923

(20,875)

(12,023)

167,779

EBITDA

312,734

115,273

(20,907)

(16,189)

390,911

Income tax expense





(43,692)

Finance income





8,567

Finance costs





(22,486)

Depreciation, depletion and  amortisation





(165,521)

Profit for the period attributable to PJSC LUKOIL shareholders





167,779

 

Geographical segments

 


For the three months ended 30 June 2016

For the three months ended 30 June 2015

For the six months ended 30 June 2016

For the six months ended

30 June 2015


Sales of crude oil within Russia

23,404

37,859

44,744

75,232

Export of crude oil and sales of crude oil by foreign subsidiaries

340,858

390,764

633,406

771,001

Sales of petroleum products within Russia

146,110

149,217

276,286

280,196

Export of petroleum products and sales of petroleum products by foreign subsidiaries

740,748

817,644

1,365,635

1,620,430

Sales of chemicals within Russia

8,915

6,296

18,094

9,394

Export of chemicals and sales of chemicals by foreign subsidiaries

8,804

8,875

18,962

17,089

Sales of gas and gas products within Russia

8,582

9,533

17,820

18,831

Export of gas products and sales of gas and gas products by foreign subsidiaries

19,877

21,187

44,285

48,859

Sales of energy and related services within Russia

11,642

11,523

30,678

29,420

Sales of energy and related services by foreign subsidiaries

2,797

1,719

6,525

4,209

Other sales within Russia

12,677

9,797

22,896

18,628

Other export sales and other sales of foreign subsidiaries

14,545

12,552

37,302

23,982

Total sales

1,338,959

1,476,966

2,516,633

2,917,271

 

For the three months ended 30 June 2016


Russian Federation

International

Elimination

Consolidated

Sales and other operating revenues





224,961

1,113,998

-

1,338,959

Inter-segment

272,210

732

(272,942)

-

Total revenues

497,171

1,114,730

(272,942)

1,338,959

Operating expenses

81,746

29,386

2,577

113,709

24,937

21,286

(921)

45,302

Profit for the period attributable to PJSC LUKOIL shareholders

58,503

6,049

(1,985)

62,567

EBITDA

125,434

35,635

(1,350)

159,719

 

For the three months ended 30 June 2015


Russian Federation

International

Elimination

Consolidated

Sales and other operating revenues





229,945

1,247,021

-

1,476,966

Inter-segment

320,174

1,474

(321,648)

-

Total revenues

550,119

1,248,495

(321,648)

1,476,966

Operating expenses

78,785

29,575

(2,532)

105,828

20,121

21,032

(1,125)

40,028

Profit (loss) for the period attributable to PJSC LUKOIL shareholders

68,049

(3,397)

(904)

63,748

EBITDA

125,477

51,775

(637)

176,615

 

For the six months ended 30 June 2016


Russian Federation

International

Elimination

Consolidated

Sales and other operating revenues





429,952

2,086,681

-

2,516,633

Inter-segment

509,437

1,327

(510,764)

-

Total revenues

939,389

2,088,008

(510,764)

2,516,633

Operating expenses

155,859

61,275

9,819

226,953

48,874

46,058

(1,807)

93,125

Profit for the period attributable to PJSC LUKOIL shareholders

99,012

7,277

(897)

105,392

EBITDA

219,209

86,517

(528)

305,198

 

For the six months ended 30 June 2015


Russian Federation

International

Elimination

Consolidated

Sales and other operating revenues





444,517

2,472,754

-

2,917,271

Inter-segment

648,487

2,757

(651,244)

-

Total revenues

1,093,004

2,475,511

(651,244)

2,917,271

Operating expenses

147,953

62,236

1,320

211,509

42,109

41,357

(2,253)

81,213

Profit for the period attributable to PJSC LUKOIL shareholders

179,874

795

(12,890)

167,779

EBITDA

303,605

102,648

(15,342)

390,911

 

In the International segment the Group receives the most substantial revenues in Switzerland and the USA.

 


For the three months ended 30 June 2016

For the three months ended 30 June 2015

For the six months ended 30 June 2016

For the six months ended

30 June 2015

Sales revenues





in Switzerland

641,323

683,645

1,148,389

1,368,906

in the USA

127,777

130,394

210,305

212,498

 

These amounts are attributed to individual countries based on the jurisdiction of subsidiaries making the sale.

 

Note 29. Fair value

 

There are the following methods of fair value measurement based on the valuation technique:

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability,

either directly or indirectly;

Level 3: unobservable inputs.

 

The following table shows the carrying amounts and fair values of financial assets and financial liabilities included in the consolidated statement of financial position at 30 June 2016 and 31 December 2015.

 

30 June 2016

Carrying amount

Fair value


Level 1

Level 2

Level 3

Total

Financial assets:






Commodity derivative contracts

14,640

-

14,640

-

14,640

Available for sale securities

3,813

-

-

3,813

3,813

Financial liabilities:






Commodity derivative contracts

16,969

-

16,969

-

16,969

Long-term debt

799,520

376,856

-

452,253

829,109

 

31 December 2015

Carrying amount

Fair value


Level 1

Level 2

Level 3

Total

Financial assets:






Commodity derivative contracts

41,648

-

41,648

-

41,648

Available for sale securities

4,045

-

-

4,045

4,045

Financial liabilities:






Commodity derivative contracts

10,827

-

10,827

-

10,827

Long-term debt

820,493

400,140

-

392,952

793,092

 

The fair values of cash and cash equivalents (Level 1), current and long-term accounts receivable (Level 3) are approximately equal to their value as disclosed in the consolidated statement of financial position. The fair value of long-term receivables was determined by discounting with estimated market interest rates for similar financing arrangements. The fair value of long-term loans (Level 3) was determined as a result of discounting using estimated market interest rates for similar financing arrangements. These amounts include all future cash outflows associated with the long-term debt repayments, including the current portion and interest. Market interest rates mean the rates of raising long-term debt by companies with a similar credit rating for similar periods, repayment schedules and similar other main terms. The fair value of bonds (Level 1) was determined based on market quotations at 30 June 2016 and 31 December 2015.

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
IR LLFLETFIAFIR