L1E Finance GmbH & Co. KG Consolidated Interim Financial Statements for the Period 1 January - 30 June 2017

Transcription

1 L1E Finance GmbH & Co. KG Consolidated Interim Financial Statements for the Period 1 January - 30 June

2 - 2 - L1E Finance GmbH & Co. KG - Consolidated Income Statement 2. Quarter 2. Quarter Sales and other operating revenues Cost of sales Gross profit Exploration costs General and administration expenses Net impairment of assets Operating Result Financial Income Financial expenses Result from continuing operations before taxes Income taxes Result from continuing operations Result from discontinued operations Net result Thereof attributable to: The owner's of L1E Finance GmbH & Co KG Non-controlling interests

3 - 3 - L1E Finance GmbH & Co. KG - Consolidated Statement of Comprehensive Income 2. Quarter 2. Quarter Net result Items that may be reclassified to profit or loss Currency translation adjustments Fair valuation of financial instruments in hedge relationship Items that will not be reclassified to profit or loss Remeasurement of defined benefit plans Other comprehensive income Total comprehensive income (after tax) Thereof attributable to: The owner's of L1E Finance GmbH & Co. KG Non-controlling interests

4 - 4 - L1E Finance GmbH & Co. KG - Consolidated Balance Sheet Assets () Non-current assets Intangible assets 1,810 1,841 Property, plant and equipment 3,280 3,096 Investment property Financial investments 2 1 Financial receivables 1 2 Other receivables and other assets Deferred tax assets ,344 5,219 Current assets Inventories Financial receivables Trade accounts receivable Other receivables and other assets Income tax assets 0 1 Cash and cash equivalents ,084 1,268 6,428 6,487 Equity and Liabilities () Equity Equity attributable to the owners of L1E Finance GmbH & Co. KG 1,761 1,694 Non-controlling interests 5 4 1,766 1,698 Non-current liabilities Provisions Notes Debt to banks 1,312 1,467 Financial debt to related companies Income tax liabilities Other liabilities 6 14 Deferred tax liabilities 1,159 1,068 4,068 4,141 Current liabilities Provisions Notes 6 7 Debt to banks 3 3 Trade accounts payable Income tax liabilities Other liabilities ,428 6,487

5 - 5 - L1E Finance GmbH & Co. KG - Consolidated Cash Flow Statement Result from continuing operations Depreciation/impairment losses/reversal of impairment losses Changes in provisions Changes in deferred taxes Gain/losses from disposal of assets 3 0 Other non-cash income/expenses Changes in working capital Changes in other balance sheet items Cash flow from operating activities Cash outflows for additions to intangible assets, property, plant and equipment and investment property Cash outflows for acquisitions Cash inflows from (cash outflows for) divestures 0 4 Cash inflows from (cash outflows for) financial assets 1 4 Cash flow from investment activities Distribution to non-controlling interests -2-1 Repayments of debt to banks Proceeds from debt to banks 94 - Cash flow from financing activities Net change in cash and cash equivalents Effects of foreign exchange rates changes and other changes in value -2 0 Cash and cash equivalents at beginning of reporting period Cash and cash equivalents at end of reporting period Supplementary information on cash flows from operating activities Income tax paid (less refunds) Interest paid Interest received 2 3 Dividends received 0 0

6 - 6 - L1E Finance GmbH & Co. KG - Consolidated Statement of Changes in Equity from 1 January to 30 June Capital provided by the limited partners in L1E Finance GmbH & Co. KG Registered capital contribution (liable) Capital accounts Outstanding capital contributions Retained earnings Currency translation adjustments Fair valuation of financial instruments Owner's equity Noncontrolling interests Total As at , , , ,115 Fair value of derivative financial instruments with no impact on profit or loss Currency translation adjustments Remeasurement of defined benefit plans Other comprehensive income Net result Total comprehensive income Capital increase/decrease Profit transfer/distribution -1 Other changes 0 As at , , , ,948 As at , , , ,698 Fair value of derivative financial instruments with no impact on profit or loss Currency translation adjustments Remeasurement of defined benefit plans Other comprehensive income Net result Total comprehensive income Capital increase/decrease Profit transfer/distribution 2 2 Other changes As at , , , ,766

7 - 7 - Notes (condensed) Basis of preparation L1E Finance GmbH & Co. KG is a German partnership and is headquartered at Überseering 40 in Hamburg, Germany. It is registered at the Hamburg local court under HRA The presented consolidated financial statements were prepared in accordance with the International Financial Reporting Standards (IFRS) applicable in the EU and comprise the period from 1 January to 30 June. In line with IAS 34, for the reporting the L1E Finance Group interim financial statements the option was chosen to prepare condensed notes compared with the scope applied to annual financial statements. With the exceptions of the changes and new rules described below, the consolidated interim financial statements were prepared using accounting policies applied in the consolidated financial statements for the period ended 31 December which provide the basis for the consolidated interim financial statements. The discount rates applied to provisions for reconditioning of sites and plugging of wells remain unchanged between 3.50 and 8.00 %. Provisions for pensions and similar obligations are discounted at an interest rate of 1.95 % in Germany and 2.50 % in Norway (31 December : 1.75 % and 2.50 %, respectively). Changes in accounting policies The International Accounting Standards Board (IASB) has adopted changes in the existing International Financial Reporting Standards (IFRS), which became effective for the L1E Finance Group as of 1 January. These amendments are not applied by L1E Finance Group as adoption by the EU remains outstanding at this time. They would have had no impact on the L1E Finance consolidated interim financial statements. Amendments to IAS 12 () "Recognition of Deferred Tax Assets for Unrealised Losses" Amendments to IAS 7 () "Disclosure Initiative" Improvements to IFRS, (): Amendments to IFRS 12 () "Disclosure of Interests in Other Entities" Scope of consolidation The consolidated financial statements include the accounts of L1E Finance GmbH & Co. KG and its subsidiaries over which the company has control. There are 24 consolidated companies (31 December : 24), 5 of them foreign (31 December : 5). Participations in 3 foreign subsidiaries (31 December : 3) of minor importance to the L1E Finance Group are reported at fair value in accordance with IAS 39. In total, these subsidiaries account for less than 1 % of the consolidated revenue and income as well as of consolidated debt.

8 - 8 - Joint arrangements are classified as either joint operations or joint ventures depending on the contractual rights and obligations of each investor. There are joint arrangements at L1E Finance Group in course of development and production activities. They are classified as joint operations since the arrangements transfer the rights and obligations relating to the assets and liabilities to the investors. The Group's shares in joint operations are accounted by recognising its respective share in assets and liabilities as well as its income and expenses. As of the balance sheet date there are 6 joint operations that are structured as separate entities (31 December : 6). Selected key financial data by region (voluntary disclosure) L1E Finance Group operates within several geographical areas. The following representation at country level is in accordance with the internal management reporting and does not represent segment information according to IFRS 8. January - June /kboed Germany/ Denmark Norway North Africa 1) Other 2) Total Production (kboed) 3) Revenues Depletion, depreciation, amortisation Net impairment of assets EBITDAX Exploration cost Capital expenditures (without acquisitions) ) Comprising Egypt and Algeria 2) Incl. rest of the world, central functions and investment property 3) On working interest basis January - June /kboed Germany/ Denmark Norway North Africa 1) Other 2) Total Production (kboed) 3) Revenues Depletion, depreciation, amortisation Net impairment of assets EBITDAX Exploration cost Capital expenditures (without acquisitions) ) Comprising Egypt and Algeria 2) Incl. rest of the world, central functions and investment property 3) On working interest basis

9 - 9 - Financial review EBITDAX The EBITDAX is used for the purpose of internal management control and is derived from the result from continuing operations before taxes adjusted by the following items: a) Interest income and expenses shown as financial income and expenses in the income statement, but adjusted for interest effects regarding pension provisions and pension plan assets which are shown separately in the line "pension items". b) Income and expenses attributable to exploration, but excluding depletion/depreciation/amortisation, impairment losses and reversal of impairment losses, interest income and expenses, currency effects and pension items for exploration, since these are adjusted in separate line items. c) Depletion, depreciation, amortisation and impairment losses as shown in the income statement less reversal of impairment losses. d) Acquisition, disposal and restructuring costs as well as further extraordinary items. This represents all fees, costs and expenses, stamp duty, registration and other taxes incurred by the company in connection with an acquisition or a disposal and material items of an unusual or non-recurring nature (e.g. resulting from restructuring activities). e) Realised and unrealised foreign exchange gains and losses (including hedging results). f) Gains over book value or losses on book value arising from the disposal of any fixed assets (other than the sale of trading stock). g) Income from pension plan assets, interest expenses, service costs or other charges attributable to a post-employment benefit scheme. Result from continuing operations before taxes a) Interest and other financing costs b) Exploration cost c) Depletion, depreciation, amortisation and net impairment losses d) Acquisition, disposal and restructuring costs and extraordinary items as well as income from investments e) Realised and unrealised gains/losses from foreign currency valuation and financial derivatives f) (Gain)/loss attributable to the disposal of fixed assets 0 0 g) Pension items EBITDAX

10 Revenues Oil Gas Other Sales revenues Other operating revenues Cost of sales Cost of operations Production costs Royalties Change in over-/underlift position -6 5 Tariffs, transportation and lease expenses Depletion, depreciation, amortisation Other Development costs 5 5 Other cost of sales Other cost of operations comprise net impairment gains on financial receivables of 37m (first 6 months of : losses of 26m) as well as restructuring costs of 1m (first 6 months of : 3m).

11 Financial income and financial expenses Income from investments 0 1 Interest income from third parties 3 4 Foreign currency exchange gains, net Gains from financial derivatives, net 1 - Financial income Interest expenses to third parties Interest expenses to affiliated companies Less capitalised borrowing costs Losses from financial derivatives, net - 61 Interest from addition to provisions Other financial expenses 2 8 Financial expenses Contractual obligations As of 30 June L1E Finance Group has commitments from firm contracts for property, plant and equipment as well as from field development projects in the amount of 910m (31 December : 1,232m) and exploration commitments in the context of concession agreements in the amount of 71m (31 December : 57m).

12 Related party disclosures Related parties to the L1E Finance Group, as defined in IAS 24, are parties who control the Group or exercise significant influence over it. Accordingly, related companies are all companies in which the Group s ultimate parent LetterOne Holdings S.A. or their controlling shareholder, respectively, have at least a significant holding. Affiliated companies LetterOne Group / / Financial receivables Financial debt Trade accounts payable 1 18 General and administrative expenses 1 0 Interest expenses All transactions are subject to market terms and conditions. Related persons are the members of the management of the partners of L1E Finance GmbH & Co. KG. As in the previous year, the management of the general partner does not receive any salaries from the L1E Finance GmbH & Co. KG. For one managing director an advisory fee was paid to the general partner. Moreover, the general partner receives a liability remuneration. Both amounts are included in general and administrative expenses in the table above. There are no business relations to the members of the management of the limited partner. Reporting on financial instruments The financial instruments comprise both primary and derivative financial instruments. Financial instruments on the assets side chiefly comprise financial assets, receivables and cash and cash equivalents. Financial assets in the category available for sale are recognised at fair value, and other primary financial assets at amortised cost. On the liabilities side, the primary financial instruments include liabilities recorded at amortised cost. The primary financial instruments are stated in the balance sheet, with the carrying amounts of financial assets reflecting the maximum risk of default. Wherever default risks are apparent in the financial assets, they are covered by impairments. Fair values of derivative financial instruments are determined using customary market valuation methods taking into account the market data available on the measurement date as well as the counterparty default risk.

13 The carrying amounts of the primary financial assets and liabilities, other than the Senior unsecured Notes, are close to their fair values. As of 30 June the fair value of the Notes amounted to 430m (31 December : 430m) and the carrying amount was 391m (31 December : 392m). The following overview represents the financial instruments to be recognised at fair value and the essential parameters on which the measurement is based. The individual levels are defined as follows in accordance with IFRS 13: Level 1: Measurement at (unadjusted) prices quoted for identical assets or liabilities on active markets. Level 2: Measurement based on inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly or indirectly. Level 3: Measurement on the basis of unobservable inputs. Fair value hierarchy Total Level 1 Level 2 Level 3 Financial investments 2 2 Derivative financial assets Fair value hierarchy Total Level 1 Level 2 Level 3 Financial investments 1 1 Derivative financial assets Derivative financial liabilities No transfers between the levels occurred during the period under review or during the previous year. The derivative financial assets and liabilities comprise oil price swaps used to partly hedge future oil sales ( 23m; 31 December : -27m) as well as physical gas forward sales contracts acquired in the course of the acquisition of DEA E&P Norge AS in 2015 and accounted for as derivatives ( 11m; 31 December : 10m). Events after the balance sheet date No events subject to mandatory disclosure occurred after the balance sheet date.

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