Liquidity and capital resources

Cash flows (RUB mn)
Indicator 2016 2017 ∆, %
Net cash provided by operating activities 321,297 421,700 31.2
Net cash used in investing activities (323,854) (312,889) (3.4)
Net cash used in financing activities (68,430) (50,521) (26.2)
Increase / (Decrease) in cash and cash equivalents (70,987) 58,290
Net cash provided by operating activities (RUB mn)
Indicator 2016 2017 ∆, %
Net cash provided by operating activities before changes in working capital, income tax, interest and dividends 361,567 439,320 21.5
Net changes in working capital 15,216 52,808 >200
Income tax paid (22,158) (36,530) 64.9
Interest paid (36,476) (39,449) 8.2
Dividends received 3,148 5,551 76.3
Net cash provided by operating activities 321,297 421,700 31.2

Net cash provided by operating activities increased by 31.2% YOY primarily due to higher operating profit and changes in working capital.

Net cash used in investing activities (RUB mn)
Indicator 2016 2017 ∆, %
Capital expenditures (384,817) (357,090) (7.2)
Acquisition of subsidiaries, shares in joint operations and equity affiliates (2,028) (8,345) >200
Net changes in deposits 48,517 (5,933)
Net changes in loans issued and other investments (2,104) 44,938
Other transactions 16,578 13,541 (18.3)
Net cash used in investing activities (323,854) (312,889) (3.4)

Net cash used in investing activities decreased by 3.4% YOY due to lower capital expenditures and repayments of loans issued to Messoyakha.

Net cash used in financing activities (RUB mn)
Indicator 2016 2017 ∆, %
Net changes in debt (63,929) 3,556
Payment of dividends to shareholders (2,598) (50,382) >200
Other transactions (1,903) (3,695) 94.2
Net cash used in financing activities (68,430) (50,521) (26.2)

Net cash used in financing activities decreased by 26.2% YOY mainly due to a decline of net amount of new funds raised and repayments of loans and borrowings. The Group paid dividends for 2016 in 3Q 2017.

Capital expenditures (RUB mn)
Indicator 2016 2017 ∆, %
Exploration and production 245,256 223,916 (8.7)
Consolidated subsidiaries 228,084 207,900 (8.8)
Joint operations 17,172 16,016 (6.7)
Refining 50,095 81,370 62.4
Marketing and distribution 9,728 12,466 28.1
Others 14,724 16,227 10.2
Subtotal capital expenditures 319,803 333,979 4.4
Change in advances issued and material used in capital expenditures, including 65,014 23,111 (64.5)
Total capital expenditures 384,817 357,090 (7.2)

Capital expenditures for exploration and production decreased by 8.7% YOY due to:

  • Completion of first stage of infrustructure construction at Novoportovskoye field
  • Completion of oil infrustructure construction at Badra
  • Decreased drilling volumes at brownfields.

Capital expenditures for refining increased by 62.4% YOY due to the second stage of modernisation program at Omsk and Moscow refineries (catalytic cracking reconstruction and construction of plant “EURO+” at Moscow refinery).

Debt and liquidity (RUB mn)
Indicator 2016 2017
Short-term loans and borrowings 80,187 131,760
Long-term loans and borrowings 596,221 548,654
Cash and cash equivalents (33,621) (90,608)
Short-term deposits (886) (5,779)
Net debt 641,901 584,027
Short-term debt / total debt, % 11.9 19.4
Net debt / EBITDA for 12 months preceding 1.60 1.19

The Group’s diversified debt structure includes syndicated and bilateral loans, bonds and other instruments.

As at December 31, 2017 average debt maturity remained unchanged from 3.6 years as at December 31, 2016.

The average interest rate increased insignificantly from 5.52% as at December 31, 2016 to 5.54% as at December 31, 2017.