Today, Bashneft Group, which comprises JSOC Bashneft, its subsidiaries, affiliates and joint ventures, published its unaudited consolidated financial statements for the first quarter of 2014 prepared in accordance with International Financial Reporting Standards (IFRS)

In the first quarter of 2014, the Group’s revenue from sales increased by 16.8% compared to the first quarter of 2013 and totalled RUB 146,668 million. The increase in revenue was primarily due to growth of oil production and output of petroleum products by 7% and 3.2%, respectively. In addition, increased exports of crude oil (by 24.2%) and petroleum products (by 21.8%) outside of the Customs Union combined with a 14.8% rise in the rouble/dollar exchange rate and a 9.5% increase in retail sales of petroleum products on the domestic market. In the first quarter of 2014, the Group’s revenue from sales increased by 0.3% compared to the fourth quarter of 2013.

In the first quarter of 2014, adjusted EBITDA grew by 20.8% compared to the first quarter of 2013 and reached RUB 25,475 million. Net income attributable to the shareholders of the parent company increased by 16.4% compared to the first quarter of 2013 and amounted to RUB 13,959 million. Adjusted EBITDA declined by 5.6% compared to the fourth quarter of 2013, while net income attributable to the shareholders of the parent company rose by 2.4%.

Capital expenditures amounted to RUB 9,053 million, an increase of 55.5% compared to the first quarter of 2013, mainly due to financing the development of the Trebs and Titov fields in the Nenets Autonomous District.

In the first quarter of 2014, Bashneft Group’s net cash generated from operating activities totalled RUB 5,121 million, which is 74.1% higher than in the first quarter of 2013. At the same time, in the first quarter of 2014, operating cash flow decreased by 78.4% compared to the fourth quarter of 2013 due to changes in working capital, including a seasonal increase in inventories, as well as prepayment received in late 2013 for petroleum products to which were supplied in the first half of January 2014.

As of the end of the first quarter of 2014, the Group’s total debt amounted to RUB 145,519 million, a 16.2% increase compared to the first quarter of 2013. The main factor behind the increase in debt was short-term loans taken for the acquisition of LLC Burneftegaz, an exploration and production company based in the Tyumen Region, in the first quarter of 2013.

In the first quarter of 2014, oil production at the Company’s fields totalled 4,115 thousand tonnes (30,040 thousand barrels), which was 7% more than in the first quarter of 2013. The main drivers for production growth included a 2.2% increase in production at brownfields due to highly efficient geological and engineering operations and pilot production at the Trebs and Titov fields.

In the first quarter of 2014, Bashneft’s average daily oil production (excluding production at LLC Burneftegaz) reached an 18-year record high of 45.6 thousand tonnes per day (332.9 thousand bbl/d).

In the first quarter of 2014, crude oil distillation at the Company’s refineries totalled 5,318 thousand tonnes of oil (38,821 thousand barrels), which is 2% more than in the first quarter of 2013. In the first quarter of 2014, the output of commercial products grew by 3.2% to 4,847 thousand tonnes. At the same time, gasoline output dropped by 5.5% compared to the first quarter of 2013, while the output of diesel fuel remained almost flat (down by 0.7%).

The share of Euro 4 and Euro 5 gasoline in the total gasoline output fell to 83.0% compared to 91.8% in the first quarter of 2013, according to revised data, due to a decline in domestic demand. In the first quarter of 2014, the share of Euro 4 and Euro 5 diesel fuel in the output of commercial diesel fuel rose to 28.6% compared to 25.8% in the first quarter of 2013.

Key financial and operating results for the first quarter of 2014

* — Barrel-tonne conversion factor of 7.3
** — Adjusted EBITDA excludes the impact of other income and expenses, which mainly include reserve accruals, financial results from sales of property, plant and equipment and inventories.