Rusneftegaz hosted its Annual General Meeting electronically on 29 May, seven weeks later than the original scheduled date of 10 April due to the ongoing coronavirus outbreak. During the video conference, the Board of Directors discussed the results in the 2019 Financial Statements, which were later unanimously approved alongside the Annual Report, and the Group’s pandemic mitigation procedures. All proposed resolutions were passed, including the re-election of the Board of Directors and a motion to reappoint Deloitte as the Group's independent auditor. Moreover, it has also been resolved that there will not be any alterations to the composition of the Audit Committee, and in lieu of the current situation, there will not be a dividend paid for the last financial year.
Rusneftegaz can publish results for the first quarter of the year as of and for the three months ended 31 March. These statements were prepared in accordance with International Financial Reporting Standards, otherwise known as IFRS, and have not been audited. The full results are disclosed in the financial section of the Group's website.
Trading for the period was heavily influenced by the coronavirus pandemic, with significant resources being deployed to mitigate the impact on Rusneftegaz’s operations. During the quarter, electricity generation significantly reduced due to a lack of demand and global commodity prices deflated as a result of worldwide overproduction. As such, management can report an overall pre-tax loss of $29.8m for the three months until 31 March, with revenues recorded receding by 7.6% to $120.6m. This was primarily due to the value of the Russian Ruble subsiding upon expectations of an imminent economic recession, in addition to the supplementary costs borne, financially and in terms of efficiency, productivity and performance, to maintain production levels throughout this time. In April, the Group also published its financial statements for the year before; with revenues totalling $563.7m yielding a post-tax profit of $223.2m, and convened a virtual Annual General Meeting in May for the first time in Rusneftegaz’s corporate history after the gathering had to be postponed from its original date. Furthermore, the second quarter of the year has been challenging and it is anticipated that the financial results will reflect this, with the further deterioration of oil prices of particular note and the imposition of stringent procedures to allay the pandemic. Management projects that the second half of 2020 will be more profitable for the Group, as demand for petroleum products grows, raising market prices accordingly, plus an increased likelihood of multilateral arrangements to cut global production. However, these forecasts are made with a significant degree of uncertainty considering the virulent nature of the disease and major caveats should be noted, with management delaying further investments accordingly until there is greater economic and epidemiological clarity.
The financial details in this article are current at the date of this report, and believed by Rusneftegaz to be accurate and true. All information is disclosed as a summary and does not purport to be complete. The data that this commentary is dependent on is obtained from sources believed to be reliable, but the Group, nor any of the directors, officers, employees, agents, subsidiaries or affiliates, can wholly guarantee the accuracy or completeness of such information.
After following developments diligently during the coronavirus pandemic, the Board of Directors has elected to extend the current shutdown for an indefinite period. Accordingly, the Rusneftegaz office in Moscow shall remain closed until further notice, with all employees working remotely continuing to do so until it is possible to return. The Group will continue to have a limited capacity to respond to non-urgent electronic and telephone communications, and necessitates the understanding of those affected at this time. All separation measures that came into effect at the end of March for those still currently working, including temperature checks and use of hand sanitizer, will remain in force for the foreseeable future. All of these procedures are constantly under review, and may be heightened if it is deemed necessary.
For the first quarter, the company can declare operational data in the following divisions:
Oil and Gas:
All production data is unaudited and derived from internal operations reports.
After an extensive consultation with all key stakeholders, the Board of Directors has resolved to hold the 2020 Annual General Meeting on 29 May via absentee voting. A new information pack, including any ballot papers, will be dispatched to all participants within one week of this announcement. Voters will then have a six week period to return their completed ballot paper, which will then be tallied prior to the commencement of the session. The agenda for the 2020 Annual General Meeting, which was initially scheduled to be held on 10 April, is unchanged from the original. As such, shareholder approval is sought to ratify the amendments to the Director's remuneration policy, and to approve an auditor for the next financial year. There will be an opportunity for voters to endorse and review the 2020 Consolidated Financial Statements, although it should be noted that said documents have already been submitted to the relevant authorities for legal reasons. All attendants will be notified of these changes electronically and in writing, and interested parties are free to submit questions in regards to these new plans.