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Lukoil Q4 sales increased 7%

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Staff Writer | March 14, 2017
In the fourth quarter of 2016 Lukoil sales increased to 1,400.9 bln RUB, or by 7% compared to the third quarter of 2016 mainly driven by higher crude oil prices.
Lukoil   An increase in the share of crude oil sale
There was an increase in the share of crude oil sales in total sales due to the production growth as well as an increase in international trading volumes.

Our sales for 2016 decreased to 5,227.0 bln RUB, or by 9.1% compared to 2015 primarily due to lower crude oil prices as well as lower sales volumes of crude oil and petroleum products, which decreased by 3.7%. Growth of international trading volumes led to the significant increase in the share of crude oil in total sales.

Changes in the product slate mix at company's refineries resulted in the higher share of light product yield, which positively impacted the dynamics of company's sales in 2016.

In the fourth quarter of 2016, company's EBITDA increased to 183.3 bln RUB, or by 10.5% as compared to the third quarter of 2016 mainly due to the higher realized prices, growth of high-margin volumes in company's overall production and crude oil export duty time lag effect, which were partially offset by the inventory build-up.

Our 2016 EBITDA was 730.7 bln RUB, down 10.5% year-on-year mainly because of lower volumes of compensation crude oil from West Qurna-2 due to the reimbursement of larger amount of historical costs in 2015. Net of this project company's EBITDA increased by 1.7% and amounted to 691.3 bln RUB.

EBITDA was positively impacted by a growth of high-margin volumes in company's overall production profile, higher refinery throughput, substantial improvement in the refined product slate and higher sales volumes via premium channels.

These factors were partially offset by an increase in the mineral oil extraction tax base rate, higher transportation tariffs, a decline in refining margins and deterioration of retail margin in Russia due to the increase in excise taxes.

In the fourth quarter of 2016, profit attributable to company's shareholders was 46.6 bln RUB, down 15.0% quarter-on-quarter. For the full year 2016, profit decreased by 29.0% and amounted to 206.8 bln RUB.

A decrease in quarterly and annual figures was mainly due to non-cash foreign exchange effect as a result of volatility in the exchange rates.

Net of this effect company's profit increased by 8.9% quarter-on-quarter and by 46.4% year-on-year. Significant year-on-year increase resulted primarily from the substantial amount of impairment losses recognized in 2015.