Gazpromneft has temporary difficulties with money

In general, Gazpromneft made a good report under IAS for the first quarter. According to the company’s document, it managed to increase EBITDA, net income and profitability. However, investors were certainly upset because of the negative free cash flow by results of the first three months of this year.

The net proceeds of Gazpromneft, minus excise and duties, decreased by 5% q/q to 328.3 billion rubles. This was caused by the decrease in volumes of crude oil and petroleum products sale with significant fall in their prices in virtually all distribution channels. Although the processing volume increased by 4% q/q, the sales volumes of petroleum products fell by more than 8% as compared to the fourth quarter. Partly, this was contributed by seasonal factors. It was managed to reduce the pressure on earnings due to reducing export duties because of the fall in oil prices in the last three months of 2014.