Transneft, the world’s largest oil pipeline company, published consolidated IFRS interim results for the second quarter of 2020 and the first half of the year on its official website for investors and shareholders on October 2, 2020.

A particular feature of the first half of 2020 was the combination of strong results in the first quarter of 2020 and a significant reduction in key operational and financial indicators in the second quarter of 2020 due to a significant decrease in Russian oil production and, therefore, in the transport volume through the Transneft system under the OPEC+ agreement of May 1, 2020.

Crude oil shipments declined by 7.1 million tons, or six percent year-on-year, and by 11.2 million tons, or nine percent year-on-year, to 109.0 million tons in the second quarter of 2020.

Shipments of oil products decreased by 0.2 million tons, or two percent year-on-year, in the first half and 1.2 million tons, or 11 percent, year-on-year to 9.3 million tons in the second quarter of 2020.

The turnover of the Transneft Group decreased by 32 billion rubles, or 12 percent, compared to the previous year, mainly due to a decrease of two billion rubles in revenues from the transport of oil and petroleum products and 28 billion rubles in sales of crude oil and petroleum products. On a quarter-on-quarter basis, revenues fell by 35 billion rubles, or 13 percent, mainly due to a decline in revenues from transport services for oil and petroleum products by 18 billion rubles and from exports of crude oil by 16 billion rubles.

The Transneft Group’s EBITDA decreased by two billion rubles, or two percent, and by 18 billion rubles, or 14 percent, during the year.

Earnings in the second quarter of 2020 were significantly impacted by the impairment of 21 billion rubles due to the unused capacity of individual oil product pipelines.

The profit attributable to Transneft shareholders amounted to 15 billion rubles, which is 73 percent less year-on-year and quarter-on-quarter.

The total debt as of June 30, 2020 was 638 billion rubles, which is 0.2 percent more than on December 31, 2019 and two percent less than on March 31, 2020.

Due to the decline in Russian oil production and crude deliveries through the Transneft system in the wake of the OPEC+ deal, the company plans to implement measures to further reduce costs and defer expenditures to later periods. In the medium term, Transneft aims to maintain the same level of technological modernization.