5.1. Transneft Group’s Key Financial and Economic Performance Indicators under IFRS

Transneft Group’s financial results for 2019 showed strong growth compared to 2018. For the year ended 31 December 2019, Transneft Group’s revenue exceeded RUB 1 trillion for the first time. The Group’s revenues went up by RUB 83,871 million or 8.6%, mainly due to the revenues growth from oil transportation services and the inclusion of NCSP Group and NFOT in Transneft Group’s consolidated indicators. The same factors mainly affected the growth of adjusted revenue, which increased by RUB  97,257 million or 12%, compared to the previous year. Transneft Group’s EBITDA for 2019 increased by 12.2% compared to the level of 2018. The profits for 2019 decreased by RUB 28,309 million or 12.6%, and amounted RUB 197,104 million.

Transneft Group’s Core Operating Results for 2019, RUB mln
Indicator 2019 2018 Absolute change Change,% 2017
Revenue 1,063,829 979,958 83,871 8.6% 884,337
Operating expenses, depreciation and amortisation exclusive (578,040) (546,083) (31,957) 5.9% (476,062)
Operating profit, depreciation and amortisation exclusive 485,789 433,875 51,914 12.0% 408,275
Depreciation and amortisation (208,700) (178,610) (30,090) 16.8% (152,637)
Operating profit 277,089 255,265 21,824 8.5% 255,638
Profit before tax 245,018 277,711 (32,693) (11.8%) 242,167
Income tax expenses (47,914) (52,298) 4,384 (8.4%) (50,362)
Profit for the reporting period 197,104 225,413 (28,309) (12.6%) 191,805
Other gross expenses exclusive of income tax (6,729) (770) (5,959) 8.7 times 578
Total comprehensive income exclusive of income tax 190,375 224,643 (34,268) (15.3%) 192,383
EBITDAExcluding crude oil sale and purchase transactions, based on contracts with Rosneft and China National United Oil Corporation. 486,255 433,436 52,819 12.2% 408,694
Debt/EBITDA 1.3 1.4 х х 1.7
PROBLEMS OF MECHANICS

IN MECHANICS, A FRAME OF REFERENCE CONSISTS OF A REFERENCE POINT, ASSOCIATED COORDINATE SYSTEM AND TIME. THIS ALLOWS TO TRACK THE LOCATION OF THE POINT IN SPACE.

PROBLEM SITUATION: In 2019, Transneft Group’s revenue exceeded RUB 1 trillion for the first time ever. The reference point is the Transneft Group pipeline system, through which oil and petroleum products flow. Axes of reference — time, amount of revenue.

A = RUB 979,958 million (amount of revenue in 2018)

В = RUB 1,063,829 million (amount of revenue in 2019)

Determine: the trajectory of the Company’s motion on the financial axes of reference and calculate the absolute and relative values of the change in the Company’s revenue in 2019 compared to 2018.

Δ1 — the absolute and Δ2 — the relative values of the change in the Company’s revenue

CHOOSE THE CORRECT ANSWER:


SOLUTION:

1. We find the absolute value of the change:

Δ1 = B — A = RUB 1,063,829 million — RUB 979,958 million = RUB 83,871 million

2. We find the relative value of the change:

Δ2 = (B * 100%/ A) — 100% = (RUB 1,063,829 million * 100% / RUB 979,958 million) — 100% = 8.6%.


ANSWER: In 2019, compared to 2018, the Company’s revenue from the sale of works and services increased by RUB 83,871 million or 8.6%.