Less: Share of profit of associates and joint ventures
(34,116)
(45,504)
33.4
Add: Share of EBITDA of equity accounted investments
88,037
107,446
22.0
Adjusted EBITDA
456,198
550,967
20.8
Profitability (%)
Indicator
December 31, 2016
December 31, 2017
∆, p. p.
Adjusted EBITDA margin
29.52
29.65
0.1
Net profit margin
13.57
14.51
0.9
Return on assets (ROA)
8.33
9.84
1.5
Return on equity (ROE)
15.58
17.38
1.8
Adjusted Return on average capital employed (ROACE)
11.77
13.9
1.9
Adjusted ROACE calculation (%)
Indicator
December 31, 2016
December 31, 2017
Adjusted EBITDA
456,198
550,967
Depreciation, depletion and amortization
(158,919)
(178,449)
Effective income tax charge on EBIT
(62,429)
(71,605)
Adjusted EBIT Adjusted EBIT represents Group’s EBIT and its share in associates and joint ventures’ EBIT.
234,850
300,913
Average capital employed
1,994,626
2,164,614
Adjusted ROACE
11.77
13.9
Liquidity
Indicator
December 31, 2016
December 31, 2017
∆, %
Current ratio
1.37
0.90
(34.3)
Quick ratio
0.66
0.43
(34.8)
Cash ratio
0.26
0.21
(19.2)
Leverage
Indicator
December 31, 2016
December 31, 2017
∆, p. p.
Net debt/ Total Assets, %
25.18
19.93
(5.3)
Net debt/ Equity, %
44.45
35.20
(9.3)
Gearing, %
30.80
25.97
(4.8)
∆, %
Net debt/ Market Capitalization
0.64
0.51
(20.3)
Net debt/ EBITDA
1.60
1.19
(25.6)
Total debt/ EBITDA
1.68
1.39
(17.3)
Main macroeconomic factors affecting operational results
The main factors affecting the Group’s operational results include:
Changes in market prices for crude oil and petroleum products
Changes in the exchange rate between the Russian rouble and the US dollar, inflation
Taxation
Changes in transportation tariffs for crude oil and petroleum products.
Changes in market prices for crude oil and petroleum products
Prices for crude oil and petroleum products on international and Russian markets are the primary factor affecting the Group’s operational results.
Petroleum product prices on international markets are primarily determined by world prices for crude oil, petroleum product supply and demand, and competition on different markets. Petroleum product price trends on international markets in turn determine domestic prices. Price trends are different for different types of petroleum products.
The increase in crude oil and petroleum product prices on international markets in 12 months 2017 had a positive impact on the Group’s results.
Price dynamics of oil and petroleum products Sources: Platts (international), Kortes (domestic)
Types of fuel
2016
2017
∆, %
International market (USD / barrel)
Brent
43.73
54.09
23.7
Urals Spot (average Med + NWE)
42.02
52.94
26.0
International market (USD / tonne)
Premium gasoline (average NWE)
467.05
557.58
19.4
Naphtha (average Med. + NWE)
377.85
477.10
26.3
Diesel fuel (average NWE)
398.58
493.65
23.9
Gasoil 0.1% (average Med.)
391.21
483.49
23.6
Fuel oil 3.5% (average NWE)
199.93
290.96
45.5
Domestic market (RUB/ tonne)
High-octane gasoline
34,574
36,820
6.5
Low-octane gasoline
29,858
31,931
6.9
Diesel fuel
27,965
32,619
16.6
Fuel oil
6,051
9,594
58.6
Rouble vs. US dollar exchange rate and inflation
The Group’s presentation currency is the Russian rouble. The functional currency of each of the Group’s consolidated entities is the currency of the primary economic environment in which the entity operates. For most entities, this is the Russian rouble.
Indicator
2016
2017
Change in Consumer Price Index (CPI), %
5.4
2.5
Average RUB / USD exchange rate for the period
67.03
58.35
USD / RUB exchange rate as of the beginning of the period
72.88
60.66
USD / RUB exchange rate as of the end of the period
60.66
57.60
Depreciation (appreciation) of Russian rouble to USD, %
(17)
(5)
Taxation
Average tax rates effective in the reporting periods for the taxation of oil and gas companies in Russia
Indicator
2016
2017
∆, %
Export duty (USD / tonne)
Crude oil
75.61
86.74
14.7
Light petroleum products
30.21
25.99
(14)
Diesel
30.21
25.99
(14)
Gasoline
46.07
25.99
(43.6)
Naphtha
53.63
47.67
(11.1)
Heavy petroleum products
61.96
86.74
40
Mineral extraction tax (RUB/ tonne)
Crude oil (RUB/ tonne)
5,770
8,134
41
For detailed information about taxation and how it is specifically applied to Gazprom Neft, see Taxation of the Oil Industry.