6. Key Financial and Economic Indicators of JSC “Transneft”
Profits and Losses from Ordinary Activities Revenue from Sale of Goods (Work, Services)
|Indicator||Amount, th.th. rubles||Change, th. rubles|
|for 2012||for 2011|
|Revenue — total||687,139,566||632,780,132||54,359,434|
|oil transportation services||494,579,033||455,495,487||39,083,546|
|oil product transportation services||27,912,977||24,260,981||3,651,996|
|oil compounding services||6,095,600||4,726,809||1,368,791|
|oil sale for export||155,133,721||143,639,379||11,494,342|
Change in the revenue from sale of goods (work, services) of the Company in 2012 as compared with 2011 was caused by:
- increase of the revenue from oil transportation services due to the increase of tariffs for the oil transportation services and of the volume of the services rendered (cargo turnover), as well as prolongation of the term of the agreed tariff applied on the route “Tikhoretsk — Tuapse Refinery”;
- increase of the revenue from oil product transportation services due to the growth of tariffs for the oil product transportation services;
- increase of the revenue from oil sale secured by oil supplies to the People’s Republic of China under a contract with the China National Petroleum Corporation, which was due to the growth of the oil prices;
- increase of the revenue from oil compounding services caused by growth of the compounding actual volume and average tariff for the sulphurous oil compounding.
Decrease of the revenue from leasing was caused by transfer of the BPS objects as a contribution to the charter capital of LLC “Baltnefteprovod” on January 31, 2012 and purchase by JSC “Svyaztransneft” of the property (communication objects) that was leased.
Cost of the Goods (Work, Services) Sold
|Indicator||Amount, th. rubles||Change, th. rubles|
|for 2012||for 2011|
|Cost — total||584,255,486||556,845,405||27,410,081|
|oil transportation services||470,172,318||450,449,512||19,722,806|
|oil product transportation services||29,104,820||24,153,046||4,951,774|
|oil compounding services||3,657,360||2,835,995||821,365|
|oil sale for export||79,625,703||76,228,906||3,396,797|
The change in the cost of the goods (work, services) sold in 2012 compared with 2011 was caused by:
- increase of the expenses under oil transportation contracts made with subsidiaries of the Company due to the growth of expenses for the trunk oil pipeline operation and commissioning of the objects of the Ust-Luga part, BPS-2 and ESPO-2 Pipeline Systems;
- increase of the expenses for the oil product transportation due to the growth of tariffs for the services of the Transneft entities effecting pipeline oil product transportation for the oil product acceptance, delivery (pumping) to the points of destination, unloading at the point of destination and of the transportation volumes, as well as in connection with the subsidiaries’ need for performance of R&D for reconstruction and technical reequipment in
- increase of the cost of the oil sold for export due to the growth of the oil prices.
Decrease of the expenses related to leasing was caused by transfer of the BPS objects as a contribution to the charter capital of LLC “Baltnefteprovod” on January 31, 2012 and purchase by JSC “Svyaztransneft” of the property (communication objects).
Gross Profit th. rubles
Increase of the gross profit in 2012 as compared with 2011 was mainly caused by increase of the gross profit from provision of services for the oil transportation received for the investment projects implementation, as well as for the oil sale in connection with oil supplies to the People’s Republic of China under the contract with the China National Petroleum Corporation due to the change of the oil prices. At that additional gross profit from oil sale to the PRC was fully leveraged by expenses for the customs duty payment.
Net Profit th. rubles
Drop in the net profit in 2012 as compared with 2011 was mainly caused by decrease of the interest income from placed free borrowed funds in connection with their allocation for the investment projects, foreign exchange loss, increase of tax on profit from foreign exchange differences on external borrowings and writing-off of the deferred tax asset created in relation to the tax loss of JSC “Transneft” incurred at the end of 2011.
Value of Net Assets th. rubles
|Indicator||As of December 31, 2012||As of December 31, 2011||As of December 31, 2010|
|Value of net assets||145,126,570||137,159,639||120,475,508|
Increase of the value of net assets in 2012 was caused by receipt by JSC “Transneft” of the net profit upon the results of 2012 in the amount of 10,652,444 th. rubles, payment in 2012 of dividends on the basis of the performance results in 2011 in the amount of 2,785,513 th. rubles, as well as growth of the deferred income as of December 31, 2012 as compared with November 31, 2011 by 100,000 th. rubles.
JSC “Transneft” Accounts Receivable and Payable Accounts Receivable th. rubles
|Type of the receivable||As of December 31, 2012||As of December 31, 2011||Change|
|Long-term accounts receivable||118,302||135,579||(17,277)|
|Settlements for the sale of the share in the simple partnership||87,118||99,452||(12,334)|
|Settlements on the interest-free loans||23,186||27,815||(4,629)|
|Settlements for other operations||7,998||8,312||(314)|
|Short-term accounts receivable||85,956,728||70,996,849||14,959,879|
|Buyers and customers||20,096,238||15,395,146||4,701,092|
|Settlements for oil transportation services||6,383,824||11,957||6,371,867|
|Settlements for compounding services||591,939||485,512||106,427|
|Settlement under brokerage contracts||261,515||266,114||(4,599)|
|Settlements for leasing services||126,896||300,481||(173,585)|
|Settlements for oil sale for export||12,728,270||14,327,006||(1,598,736)|
|Under contract agreements for oil transportation||878,184||2,480,682||(1,602,498)|
|Under contract agreements for oil product transportation||2,243,331||1,018,998||1,224,333|
|Under brokerage contracts for oil transportation||899,132||1,002,799||(103,667)|
|Under brokerage contracts for oil product transportation||252,181||359,660||(107,479)|
|On acquisition of non-current assets||143,881||271,669||(127,788)|
|Settlement of taxes and dues||43,451,489||37,302,355||6,149,134|
|Profit tax (before joining taxpayer consolidated group)||96,298||6,915,494||(6,819,196)|
|Profit tax of TCG||11,131,577||11,131,577|
|Other taxes and dues||14,258||9,058||5,200|
|Settlements with dependent entities||2,518||2,538||(20)|
|Settlements with personnel under other transactions||395||583||(188)|
|Settlement on interest on issued loans||13,586,451||10,734,755||2,851,696|
|Settlement under brokerage contracts||1,078,580||721,203||357,377|
Long-term Accounts Receivable
The most significant indicator of the long-term accounts receivable is the debt created in connection with sale in 2002 of the share in the simple partnership established for construction of the Baltic pipeline system on a 25 years’ instalment plan. As compared with December 31, 2011, it decreased due to passing of a part of the long-term accounts receivable to the short-term accounts receivable subject to repayment within 12 months as of the reporting date. The receivable balance is denominated in conventional units and shall be repaid by equal instalments on or before January 30, 2027. The payment shall be effected in Russian rubles at the USD rate fixed by the Bank of Russia as of the date of payment.
Short-term Accounts Receivable
The change in the short-term accounts receivable as at the end of the reporting year as compared with the previous year was mainly caused by:
- increase in the debt of buyers and customers for oil transportation;
- increase of the accounts receivable under settlements with budget regarding profit tax as of the responsible member of TCG.
Accounts Payable th. rubles
|Type of account payable||As of December 31, 2012||As of December 31, 2011||Change|
|Long-term accounts payable||582||582||—|
|Settlements with other creditors||582||582||—|
|Short-term accounts payable||186,862,497||160,344,136||26,518,361|
|Suppliers and contractors||132,109,797||121,308,998||10,800,799|
|Oil transportation settlements||111,467,862||104,757,050||6,710,812|
|Oil product transportation settlements||11,272,807||6,530,405||4,742,402|
|Oil purchase settlements||7,658,365||9,187,084||(1,528,719)|
|Oil compounding settlements||355,164||291,278||63,886|
|Settlements for construction, reconstruction, modernization and acquisition of fixed assets||285,350||155,476||129,874|
|Debt to the state extra budget funds||165||146||19|
|Payments in advance received (VAT excluded)||34,226,223||31,403,333||2,822,890|
|Under oil transportation contracts||26,636,367||25,700,678||935,689|
|Under oil product transportation contracts||7,270,937||5,641,765||1,629,172|
|Under other contracts||318,919||60,890||258,029|
|Settlement under brokerage contracts||10,292,390||7,525,211||2,767,179|
|Settlements under brokerage contracts for oil transportation||751,731||838,190||(86,459)|
|Settlements under brokerage contracts for oil product transportation||1,190,504||1,110,826||79,678|
|Settlements with the companies of the “Transneft” Group under other brokerage contracts||8,102,267||4,462,883||3,639,384|
|Settlements under brokerage contracts for oil realization||—||944,000||(944,000)|
|Settlement under other brokerage contracts||247,888||169,312||78,576|
|Settlements with TCG||10,167,620||—||10,167,620|
|Settlements with other creditors||32,903||31,316||1,587|
The change in the short-term accounts payable as of the end of the reporting year as compared with the previous year was mainly caused by the following factors:
- increase of the debt to the companies of the “Transneft” Group under settlements for the oil and oil product transportation;
- increase of the debt to the companies of the “Transneft” Group under brokerage contracts;
- creation of the debt under settlements with members of the taxpayer consolidated group.
Taxes and dues liabilities accrued during the reporting and previous year are characterized by the following data:
|Item No.||Tax||2012, th. rubles||2011, th. rubles||Change (+/-)|
|1||Corporate profit tax||(8,696)||(908)||(7,788)||858|
|2||Profit tax accrued by TCG||44,120,277||44,120,277|
|3||Value added tax (VAT)||(61,321,308)||(59,070,982)||(2,250,326)||4|
|5||Other taxes and dues||1,372,278||645,658||726,620||113|
|to the federal budget||(56,743,461)||(59,012,029)||2,268,568||(4)|
|to the regional and local budgets||40,504,876||716,804||39,788,072||5,551|
|to extra budget funds||600,039||156,319||443,720||284|
In 2012, JSC “Transneft” accrued and paid its profit tax as a responsible member of the Transneft taxpayer consolidated group (TCG) that comprised 37 companies of the Transneft system under agreement for the TCG foundation No. 175/TNF/12 dated March 19, 2012.
The total amount of the profit tax accrued for TCG in 2012 equalled 44,120,277 th. rubles, the amount of the TCG profit tax actually paid to the budget for 2012 equalled 55,251,045 th. rubles. The excessive payment of 11,130,768 th. rubles arose due to the fact that the total amount of the monthly advance payments effected in Q4 2012 according to the rules of the Tax Code of the Russian Federation exceeded the amount of the TCG profit tax accrued for the corresponding period.
The amount of other taxes and dues accrued in 2012 for payment to the budget and extra budget funds (tax on the dividend income, estate tax, personal income tax, insurance contributions to the state budget funds, transport tax) equalled 1.6 bln rubles.
The value added tax refundable from the budget in 2012 amounted to 61.3 bln rubles. According to the effective tax laws, the amounts of the tax credit on transactions on the services for the oil and oil products transportation beyond the Russian Federation, as well as on the oil sale to the PRC can be refunded from the budget.
Indicators of the JSC “Transneft” Financial Standing
Data on Profitability, Working Capital Turnover
|Coefficient of the current liquidity||(line 1200 F1 — line 1220 F1 — line 1231 F1) / (line 1510 F1 + line 1520 F1 + line 1550 F1)||0.93||1.24||-0.31|
|Critical liquidity (intermediate coverage) coefficient|| (line 1200 F1 — line 1210 F1 — line 1220 F1 — line 1231 F1) / (line 1510 F1 + line 1520 F1 +
line 1550 F1)
|(Products) Sales profitability, %||Line 2200 F2 / line 2110 F2 * 100||2.68%||0.40%||2.28%|
|Accounts receivable turnover coefficient||Line 2110 F2 / ((line 1231 F1 n + line 1232 F1 k + line 1232 F1 n + line 1232 F1 k) / 2)||8.76||11.84||-3.08|
Decrease in the liquidity coefficient indicators as compared with 2011 was caused by quicker rates of the current assets reduction as compared with decrease in the current liabilities. The current assets were reduced primarily through decrease of the volume of the short-term financial investments and funds in the result of issue of long-term loans to the related parties for implementation of the investment program of JSC “Transneft”.
The positive dynamics of the sales profitability indicator was caused by revenue increase in the context of lower rates of growth of the full cost value of the performed work and services in connection with receipt of revenue for implementation of investment projects.
Accounts receivable turnover dropped due to the fact that growth of the average annual amount of the accounts receivable exceeded the rate of the revenue growth.
Credit Ratings of JSC “Transneft”
In 2012, JSC “Transneft” maintained its credit ratings at the high investment level:
BBB (forecast: stable) — as per S&P’s international scale
Baa1 (forecast: stable) — as per Moody’s international scale
From the point of view of rating agencies, the company has a high potential to perform its financial obligations. The JSC “Transneft” rating corresponds to the sovereign rating of the Russian Federation as per the Moody’s and S&P scales, which is one of the best indicators among Russian companies (fig.1).
Fig. 1. Ratings of the major Russian companies as per Moody’s and S&P scales
Sberbank of Russia has no Standard&Poor’s long-term credit rating.
The credit rating of the bank as per Moody’s scale is Baa1.
The high credit rating of JSC “Transneft” plays a very important role, in particular, when considering issues of the external borrowing cost. Due to the high level of its creditability, JSC “Transneft” was able to raise large amounts for financing of the major infrastructure projects at an acceptable rate.