Quarter ended 30 September 2013
- Revenue of MUSD 1,013.7, up 13% from Q2 2013.
- Profit before tax of MUSD 91.1, up 54% from Q2 2013.
- Profit for the period of MUSD 61.7, up 54% from Q2 2013.
- EBITDA of MUSD 175.1, up 1% from Q2 2013.
Nine months ended 30 September 2013
- Revenue of MUSD 2,795.4, up 10% from 9m 2012.
- Profit before tax of MUSD 214.1, down 43% from 9m 2012.
- Profit for the period of MUSD 145.8, down 50% from 9m 2012.
- EBITDA of MUSD 499.1, down 12% from 9m 2012.
- Transactions completed to form joint venture with Repsol.
- Launch of gas production in Tomsk region and Khanty-Mansiysk region.
- Eurobond offering of MUSD 500 completed in May 2013.
- Preference shares issue raised MUSD 100 in June 2013.
Subsequent events
- Alliance Group’s potential acquisition of Alliance Oil Company by way of amalgamation.
- Tender offer for convertible bonds of MUSD 265.
| Quarter ended 30 September 2013 | Quarter ended 30 June 2013 | ?, % | Quarter ended 30 September 201 2 | Nine months ended 30 September 2013 | Nine months ended 30 September 2012 | ?, % | |
| Operational results | |||||||
| Consolidated crude oil production, bopd | 51,807 | 52,683 | -2% | 53,315 | 52,133 | 54,413 | -4% |
| Consolidated gas and gas liquids production, boepd | 9,333 | 9,091 | 3% | - | 7,422 | - | 100% |
| Refining volume, bopd | 96,428 | 85,026 | 13% | 84,571 | 89,501 | 79,325 | 13% |
| Financial results | |||||||
| Revenue, MUSD | 1,013.7 | 900.7 | 13% | 904.3 | 2,795.4 | 2,536.6 | 10% |
| Profit for the period, MUSD | 61.7 | 40.0 | 54% | 132.0 | 145.8 | 290.8 | -50% |
| EBITDA, MUSD | 175.1 | 173.1 | 1% | 214.0 | 499.1 | 564.9 | -12% |
| Basic earnings per ordinary share, USD | 0.18 | 0.11 | 64% | 0.72 | 0.43 | 1.62 | -73% |
| Diluted earnings per ordinary share, USD | 0.18 | 0.11 | 64% | 0.66 | 0.43 | 1.53 | -72% |
Dear Shareholders,
In the third quarter of 2013, Alliance Oil Company demonstrated strong financial and operational performance. Crude oil and oil product prices increased and the average exchange rate of the RUB to the USD weakened compared to the previous quarter.
Consolidated Revenue, EBITDA and Profit grew by 13%, 1% and 54%, respectively, compared to the second quarter of 2013. The average daily production of hydrocarbons was flat quarter-on-quarter. Meanwhile refining volumes increased by 13% compared to the second quarter of 2013 despite the water flooding in the Russian Far East.
In the upstream segment, consolidated oil production declined slightly compared to the previous quarter primarily due to lower production in the Timano-Pechora and Tomsk regions. Approximately 43% of crude production was mineral extraction tax exempt in the quarter. Consolidated and joint venture gas and gas liquids production increased quarter-on-quarter.
In the downstream segment, the record high refining throughput was driven by continued high oil product demand in the wholesale and bunker markets. The Company sold 8.9 million barrels of oil products in the third quarter of 2013 compared to 8.3 million barrels in the previous quarter.
The Company’s balance sheet remained solid, total debt was essentially unchanged while the net debt to EBITDA ratio increased quarter-on-quarter from 2.5 to 2.9.
Outlook
In October 2013, the total hydrocarbon production amounted to 66,200 barrels of oil equivalent per day, including about 5,800 barrels of oil equivalent per day from the joint venture with Repsol. The Company expects to meet its double digit production growth target for the full year of 2013.
The refining volumes increased further in October 2013 marking another milestone of raising the refining capacity at the Khabarovsk refinery to 100,000 barrels of oil per day. As previously announced, the modernisation plan of the Khabarovsk refinery and the launch of the new hydroprocessing complex have been reviewed. The mechanical completion and testing of the Hydrotreater and Sulfur production units are expected in the end of 2013. The testing and commissioning of the Hydrocracker and Hydrogen production units are planned for the first half of 2014. The final testing schedule and launch will depend on actual winter conditions. The schedule for connecting the Khabarovsk refinery to the ESPO system was also adjusted against background of the unprecedented water flooding in the Russian Far East. The first crude delivery to the refinery via pipeline is now scheduled for the second half of 2014.
In late October, Alliance Group proposed to acquire all shares of Alliance Oil Company, not currently held by Alliance Group and its affiliates. The independent directors of Alliance Oil Company’s board have recommended that shareholders vote in favour of the transaction by way of amalgamation, at a Special General Meeting on 2 December 2013. Subject to approval by the shareholders and certain other conditions, the consummation of the transaction would imply that Alliance Oil Company is taken private and the shares of the Company are delisted from NASDAQ OMX Stockholm. In connection with this, Alliance Oil Company launched a tender offer to redeem outstanding convertible bonds of MUSD 265, subject to the completion of the amalgamation.
Arsen Idrisov, Managing Director
For further information:
Arsen E Idrisov, Managing Director, Alliance Oil Company Ltd, telephone +7 (495) 777 18 08.
Eric Forss, Chairman of the Board, telephone +46 8 611 49 90.
Conference call
Date: Thursday, 21 November 2013
Time: 10.00 CET
To participate in the conference call you may choose one of the following options:
Telephone
Dial one of the following numbers a few minutes before the conference starts:
| Location | Local Number | Toll-Free |
| Russia | +7 495 662 5793 | |
| Sweden | +46 8505 20 278 | 0200 125 058 |
| United Kingdom | +44 20 71 90 159 5 | 0800 358 5263 |
Conference ID: 4650834
Web
The conference call will be webcasted live at www.allianceoilco.com .
A replay of the conference call will be available at www.allianceoilco.com .
Alliance Oil Company Ltd is a leading independent oil and gas company with vertically integrated operations in Russia and Kazakhstan. Alliance Oil has substantial oil and gas reserves and downstream operations that include the Khabarovsk refinery and the leading network of gas stations and wholesale oil products terminals in the Russian Far East. Alliance Oil's depository receipts are traded on the NASDAQ OMX Nordic under the symbol AOIL.
