LIQUIDITY AND CAPITAL RESOURCES

Cash Flows

RUB million

2013

2012

Change, %

Net cash provided by operating activities

276,968

247,695

11.8

Net cash used in investing activities

(255,940)

(180,456)

41.8

Net cash used in financing activities

(13,010)

(16,032)

(18.8)

NET INCREASE OF CASH AND CASH EQUIVALENTS

8,018

51,207

(84.3)

Net Cash from Operating Activities

RUB million

2013

2012

Change, %

Net cash from operating activities before changes in working capital, income tax, interest and dividends

307,548

289,069

6.4

Net changes in working capital

7,942

(8,349)

Income tax paid

(33,514)

(28,932)

15.8

Interest paid

(9,981)

(11,302)

(11.7)

Dividends received

4,973

7,209

(31.0)

NET CASH PROVIDED BY OPERATING ACTIVITIES

276,968

247,695

11.8

  • Net cash from operating activities increased 11.8% year-on-year, mainly due to an increase in EBITDA and a reduction in working capital
Net Cash Used in Investing Activities

RUB million

2013

2012

Change, %

Capital expenditure

(208,611)

(169,213)

23.3

Acquisition of subsidiaries and shares in equity affiliates

(5,857)

(2,261)

159.1

Net changes in deposits

(29,425)

(4,239)

594.1

Other transactions

(12,047)

(4,743)

154.0

NET CASH USED IN INVESTING ACTIVITIES

(255,940)

(180,456)

41.8

  • Net cash used in investing activities increased 41.8% year-on-year mainly due to an increase in capital expenditure and cash deposited in banks.
Net Cash Used in Financing Activities

RUB million

2013

2012

Change, %

Net changes in debt

56,395

25,418

121.9

Payment of dividends to shareholders

(63,328)

(34,433)

83.9

Acquisition of non-controlling interest in subsidiaries

(1,755)

(5,572)

(68.5)

Other transactions

(4,322)

(1,445)

199.1

NET CASH USED IN FINANCING ACTIVITIES

(13,010)

(16,032)

(18.8)

  • Net cash used in financing activities decreased year-on-year to RUB 13,010 million. This change was due to:
    • The Group’s higher loan portfolio. In 2013, net increase in debt was RUB 56,395 million (against RUB 25,418 million in 2012);
    • An increase in total dividends paid to RUB 63,328 million (against RUB 34,433 million in 2012), due to an increase in dividend payment to RUB 9.3 per share in 2012 (versus RUB 7.3 per share in 2011), as well as the payment of interim dividends at RUB 4.09 per share for the 1H2013.
Capital Expenditure

RUB million

2013

2012

Change, %

Exploration and production

144,035

101,923

41.3

Subsidiaries

132,178

90,812

45.6

Proportionally consolidated companies

11,857

11,111

6.7

Refining

27,264

41,844

(34.8)

Marketing and distribution

17,523

16,224

8.0

Other

6,151

9,802

(37.2)

SUBTOTAL CAPITAL EXPENDITURE

194,973

169,793

14.8

Change in advances issued and material used in capital expenditures

13,638

(580)

TOTAL CAPITAL EXPENDITURE

208,611

169,213

23.3

  • Capital expenditure for Exploration and Production increased 41.3% year-on-year mostly due to more drilling programs at the Company’s old fields and in the East area of the Orenburg oil and gas condensate field, including a greater number of more technology-intensive horizontal wells allowing the more efficient development of complex fields, as well as due to financing large infrastructure facilities at the Novoportovskoye field in order to prepare for its full-scale development.
  • Capital expenditure for refining decreased 34.8% year-on-year mostly due to the completion of the construction of catalyst cracking gasoline hydrotreatment and diesel hydrotreatment facilities at the Omsk refinery in 2012.
Debt and Liquidity

RUB million

2013

2012

Short-term loans and borrowings

52,413

77,193

Long-term loans and borrowings

261,455

166,447

Cash and cash equivalents

(91,077)

(79,199)

Short-term deposits

(36,869)

(7,519)

NET DEBT

185,922

156,922

Short-term debt / total debt, %

16.7

31.7

Net debt / EBITDA

0.59

0.51

  • The Group has a diversified debt structure that includes pre-export financing, syndicated and bilateral loans, bonds, and other instruments.
  • The average maturity of the Group’s debt increased from 3.81 years as at 31 December 2012 to 5.15 years as at 31 December 2013.
  • The average interest rate increased from 3.48% as at 31 December 2012 to 3.68% as at 31 December 2013.