Today Bashneft Group, which includes JSOC Bashneft, its subsidiaries and affiliates, has published its unaudited consolidated financial results prepared in accordance with the International Financial Reporting Standards (IFRS) for the 2nd quarter of 2012 and the six months ended 30 June 2012.

In the 2nd quarter of 2012, net profit attributable to owners of the parent company amounted to US$ 337 million, which is 24.1% less than in the 1st quarter of 2012. In the 2nd quarter of 2012, EBITDA decreased by 7.4% to US$ 763 million. The Group’s sales revenue in the 2nd quarter of 2012 totalled US$ 4,082 million, which is 4.1% higher than in the 1st quarter of 2012.

During the 1st half of 2012, the Group’s net profit excluding minority interest amounted to US$ 781 million, having decreased by 13.4% compared to the 1st half of 2011. At the same time, EBITDA decreased by 3.7% to US$ 1,587 million, and the Group’s revenue in the 1st half of 2012 totalled US$ 8,005 million, being approximately the same as that in the 1st half of 2011.

In the 1st half of 2012, the amount of net cash generated by Bashneft Group from operating activities increased by 93.2% compared to the same period in 2011 and totalled US$ 1,186 million. The growth of operating cash flow during the 1st half of 2012 enabled Bashneft to increase capital expenditure by 16.6% to US$ 436 million and to reduce net debt by 21.9% to US$ 2,103 million.

Alexander Korsik, the President of JSOC Bashneft, pointed out, «Operating results for the 1st half of 2012 show that we are consistently implementing our strategy. Bashneft maintained the optimal level of oil production and refining, as well as significantly boosted retail sales. The increase in operating cash flow enabled us to reduce the debt load, invest in new acquisitions in the upstream sector and fulfil the obligations to buy back securities from the shareholders as part of Bashneft’s reorganization.»

Between January and June 2012, oil production at the Group’s oilfields totalled 7,651 thousand tonnes, which is 3.1% higher than in the same period in 2011. In the 2nd quarter of 2012, Bashneft produced 3,811 thousand tonnes of oil, which is approximately the same as in the 1st quarter of 2012. The Group’s average daily production has stabilized at the optimal level for oilfields under development and has amounted to about 42 thousand tonnes per day for four consecutive quarters.

Between January and June 2012, Bashneft’s Ufa refining complex processed 10,074 thousand tonnes of oil, which is 3.4% less than in the same period in 2011; the reduction is due to the scheduled major overhaul at OJSC Ufimsky refinery plant in April and May. During the 1st half of 2012, the average refining depth amounted to 85.1%, and the share of light products totalled 58.9%, which is slightly less than in the same period in 2011.

In the 2nd quarter of 2012, sales of petroleum products and petrochemicals totalled 4,737 thousand tonnes, which is 9.2% more than in the 1st quarter of 2012, while the sales volume in the 1st half of 2012 (9,074 thousand tonnes) was 4.2% less than in the same period in 2011.
Bashneft continued to increase retail sales, consistently implementing the strategy for expanding distribution channels providing access to consumers. Thus, between January and June 2012, the Group’s retail sales of petroleum products increased by 65.5% compared to the same period in the previous year and reached 619 thousand tonnes.

KEY FINANCIAL AND OPERATING RESULTS
FOR THE SECOND QUARTER AND THE SIX MONTHS OF 2012