Consolidated financial results
according to IFRS For reader convenience, amounts in USD were converted at the average exchange rate for the applicable period (average exchange rates for 2020 and 2019 were 413.46 and 382.87 KZT/USD, respectively; period-end exchange rates as at 31 December 2020 and 31 December 2019 were 420.91 and 382.59 KZT/USD, respectively).
| ||USD/bbl||64.21||41.84|| |
|Average exchange rate||KZT/USD||382.87||413.46||8.0|
|Revenue||KZT bln||6,859||4,556|| |
|Share in profit of JVs and associates||KZT bln||828||511||–38.3|
|Net profit||KZT bln||1,158||172||–85.2|
|Net profit for the period attributable to the parent company’s shareholders||KZT bln||1,197||273||–77.2|
| ||KZT bln||1,963||1,151||–41.3|
| Free cash ||KZT bln||592||88||–85.1|
|USD mln||1,537||213|| |
| Net ||KZT bln||2,361||2,594||9.9|
| Total ||KZT bln||3,838||4,078||6.3|
|KZT mln|| ||2020||Change||%|
|Revenue and other income|
|Share in profit from joint ventures and associates, net||827,979||511,195||–316,784||–38.3|
|Gain on sale of subsidiaries||17,481||519||–16,962||–97.0|
|Other operating income||24,936||24,576||–360||–1.4|
|Total revenue and other income||7,970,132||5,202,080|| ||–34.7|
|Costs and expenses|
|Cost of purchased oil, gas, oil products and other materials|| ||–2,277,066||1,636,678||–41.8|
|Taxes other than income tax||–454,295||–269,559||184,736||–40.7|
|Depreciation, depletion and amortization||–337,424||–360,283||–22,859||6.8|
|Transportation and selling expenses||–420,402||–458,186||–37,784||9.0|
|General and administrative expenses||–213,967||–170,208||43,759||–20.5|
|Impairment of property, plant and equipment, intangible assets, exploration and evaluation assets||–150,751||–243,694||–92,943||61.7|
|Impairment of investments in joint ventures and associate||−||–30,654||−||−|
|Net foreign exchange (loss)/gain||8,479||–23,935||–32,414|| |
|Total costs and expenses|| || ||1,661,621||–25.2|
|Profit before income tax||1,384,631||278,200||–1,106,431||–79.9|
|Income tax expenses||–226,180||–106,303||119,877||–53.0|
|Profit for the year from continuing operations||1,158,451||171,897||–986,554||–85.2|
|Profit after income tax for the year from discontinued operations||6||−||−||−|
|Net profit for the year||1,158,457||171,897||–986,560||–85.2|
|Net profit/(loss) for the year attributable to:|
|the parent company’s shareholders||1,197,157||273,237||–923,920||–77.2|
|the non-controlling interest||–38,700||–101,340||–62,640||161.9|
Revenue for 2020 was KZT 4,556 bln (USD 11,019 mln), down 33.6% year-on-year. The downtrend was mainly attributable to a 34.8% year-on-year decrease in the average Dated Brent oil price, lower oil sales due to production cuts at certain fields in accordance with the OPEC+ deal, as well as lower volumes of oil trading and sales of oil products by KMG International. The decrease in revenue was partially offset by the tenge’s depreciation against US dollar by 8.0%.
Share in profit from joint ventures and associates
The share in profit from joint ventures and associates in 2020 decreased by 38.3% year-on-year to KZT 511 bln (USD 1,236 mln) mainly due to a decrease in the profit from Tengizchevroil LLP (TCO), JSC Mangistaumunaigaz (MMG) and Kashagan. The share in the profit from TCO and MMG decreased by 58.2% and 79.6% in the reporting period, to KZT 173 bln (USD 420 mln) and KZT 17 bln (USD 41 mln), respectively, due to lower average oil prices and production decline. The share in Kashagan’s loss in 2020 was KZT 7 bln (USD 17 mln) as a result of lower oil prices. At the same time, Kashagan’s free cash flow was positive at USD 463 mln. In 2020, Ural Group Limited (UGL), PetroKazakhstan Inc. (PKI) and Valsera Holdings B.V. (Valsera) also made a loss of KZT 10 bln (USD 25 mln), KZT 9 bln (USD 21 mln) and KZT 6 bln (USD 15 mln) in terms of KMG’s share, respectively.
In the reporting period, the cost of purchased oil, gas, oil products and other materials amounted to KZT 2,277 bln (USD 5,507 mln), reflecting a decrease of 41.8% year-on-year, due to lower cost of purchased crude oil and oil for refining, as well as lower global oil prices, which was partly offset by the tenge’s depreciation against US dollar. Purchases of oil for resale decreased by 46.4% year-on-year to KZT 1,311 bln (USD 3,171 mln). The cost of oil for refining fell by 50.9% year-on-year to KZT 314 bln (USD 758 mln).
In 2020, production expenses increased slightly year-on-year to KZT 741 bln (USD 1,792 mln).
General and administrative expenses decreased by 20.5% to KZT 170 bln (USD 412 mln).
Taxes other than income tax decreased by 40.7% to KZT 270 bln (USD 652 mln) mainly as a result of lower expenses on rent tax, export customs duty and MET as a result of lower oil prices.
Payroll expenses in 2020 amounted to KZT 427 bln (USD 1,034 mln), showing a 0.3% year-on-year decrease, and were reflected in production expenses, transportation and selling expenses, and general and administrative expenses in the consolidated statement of comprehensive income.
Finance costs in 2020 were KZT 298 bln (USD 720 mln), down 6.3% year-on-year, mainly due to early settlement of TCO prepayment facilities in 2019.
Impairment of assets
As a result of significant changes in market prices amid concerns over the
The Company’s net profit fell 85.2% year-on-year to KZT 172 bln (USD 416 mln) due to lower average oil prices, lower revenue and income attributable to the share in profit from joint ventures and associates, and recognition of impairment of assets, which was partly offset by lower costs and taxes other than income tax.
Net profit for the period attributable to the parent company’s shareholders was KZT 273 bln (USD 661 mln).
In 2020, the Company’s CAPEX on an accrual basis (disclosed in the segment reporting) was KZT 454 bln (USD 1,098 mln), down 10.1% year-on-year. The main impact came from a 35% year-on-year decrease in CAPEX in the Oil and Gas Exploration and Production segment to KZT 168 bln (USD 405 mln). CAPEX on a cash basis amounted to KZT 396 bln (USD 959 mln) in 2020 compared to KZT 444 bln (USD 1,160 mln) in 2019.
We analyse segmented information according to IFRS. Segment performance is evaluated based on revenues and net profit. The Group’s operating segments have their own structure and management according to the type of produced goods and provided services. Moreover, all segments are strategic directions of the business, which offer different types of goods and services in different markets. The Company’s activity consist of four main operating segments: oil and gas exploration and production, oil transportation, gas trading and transportation, refining and sales of crude oil and refined products, NC KMG’s Corporate Centre, etc. (oilfield service companies and other insignificant companies). KMG presents the Corporate Centre’s activities separately, since NC KMG not only performs the functions of the parent company, but also carries out operational activities (processing of crude oil at Atyrau and Pavlodar refineries, and further sale of oil products to both domestic and export markets).
Key factors that affected changes in EBITDA by segment in 2020:
- Oil and gas exploration and production segment’s EBITDA decreased by USD 1,571 mln due to lower oil prices and decreased sales of crude oil
- Gas trading and transportation segment’s EBITDA decreased by USD 343 mln due to a decrease in revenues from gas exports and international transit
- Refining and sales of crude oil and oil products segment’s EBITDA decreased by USD 180 mln mainly due to lower sales by KMG International
|Oil and gas exploration and production||KZT mln||962,778||390,221||–59|
|% of EBITDA||49||34|| |
|Oil transportation||KZT mln||219,204||226,838||3|
|% of EBITDA||11||20||9 pp|
|Gas trading and transportation||KZT mln||457,829||352,565||–23|
|% of EBITDA||23||30||7 pp|
|Refining and sales of crude oil and oil products||KZT mln||268,013||214,839||–20|
|% of EBITDA||14||19||5 pp|
|Corporate Centre||KZT mln||42,345||–25,077||–159|
|% of EBITDA||2||–2||–4 pp|
| ||KZT mln||12,565||–7,959||–163|
|% of EBITDA||1||–1||–2 pp|
|% of EBITDA||100||100||0 pp|
|Net cash flows from operating activities||123,801||446,533||322,732||261|
| Adjusted cash flows from operating ||988,251||446,533||–541,718||–55|
|Net cash flows used in investing activities||–319,562||–205,611||113,951||–36|
|Net cash flows used in financing activities||–270,371|| ||25,144||–9|
|Effects of exchange rate changes||–14,985||85,341||100,326||–670|
|Change in allowance for expected credit losses||–279||376||655||–235|
|Net change in cash and cash equivalents|| ||81,412||562,808||–117|
|Net change in cash and cash equivalents, USD mln||–1,257||197||1,454||–116|
Сash and cash equivalents
Consolidated cash and cash equivalents, including cash on deposit, increased marginally by 0.6% year-on-year to KZT 1,485 bln (USD 3,528 mln) as at 31 December 2020. The increase in cash and cash equivalents is mainly due to a positive net cash flow from operating activities in the amount of KZT 447 bln (USD 1,080 mln) and the effect of exchange rate changes on cash and cash equivalents in the amount of KZT 85 bln (USD 206 mln). US dollar-denominated consolidated cash and cash equivalents decreased by 8.6% to USD 3,528 mln compared to USD 3,859 mln as at 31 December 2019.
The Company is a parent company of the Group and receives dividends from its subsidiaries, JVs and associated companies. The Company received dividends in the amount of KZT 135 bln (USD 326 mln) and KZT 126 bln (USD 330 mln) in 2020 and 2019, respectively. In 2020, dividends from Asia Gas Pipeline LLP (AGP) amounted to KZT 54 bln (USD 130 mln), from Mangistau Investments B.V. (MIBV) – KZT 32 bln (USD 78 mln), and from KazRosGas LLP – KZT 15 bln (USD 37 mln).
In May 2020, KMG paid dividends in the amount of KZT 82 bln (USD 198 mln), including KZT 74 bln (USD 178 mln) paid to
|Property, plant and equipment||4,369,745||4,484,271|| || |
|Long-term bank deposits||56,528||52,526||4,002||7.6|
|Investments in joint ventures and associates||6,471,021||5,590,384||880,637||15.8|
|Other non-current assets||1,279,570||1,314,823||–35,253||–2.7|
|Short-term bank deposits||282,472||359,504|| || |
|Cash and cash equivalents||1,145,864||1,064,452||81,412||7.6|
|Other current assets||1,001,569||1,208,351|| || |
|Assets classified as held for sale||46,518||7,604||38,914||511.8|
|Total assets|| || || ||4.1|
|Total assets, USD mln||34,813||36,807||–1,993||–5.4|
|Equity and liabilities|
|Total equity, USD mln||20,519||21,424||–905||–4.2|
|Other non-current liabilities||966,341||862,741||103,600||12.0|
|Current borrowings||361,556||253,428||108,128|| |
|Other current liabilities||971,819||1,185,014||–213,195||–18.0|
|Total liabilities, USD mln||14,294||15,383||–1,088||–7.1|
|Total equity and liabilities||14,653,287||14,081,915||571,372||4.1|
|Total equity and liabilities, USD mln||34,813||36,807||–1,993||–5.4|