NOVATEK announces consolidated IFRS results for second quarter and first half 2015

MOSCOW--()--

NOVATEK ANNOUNCES CONSOLIDATED IFRS RESULTS

FOR SECOND QUARTER AND FIRST HALF 2015

Moscow, 29 July 2015. OAO NOVATEK today released its consolidated interim condensed financial statements as of and for the three and six months ended 30 June 2015 prepared in accordance with International Financial Reporting Standards (“IFRS”).

IFRS Financial Highlights

(in millions of Russian roubles)

2Q 2015       2Q 2014               1H 2015       1H 2014    
111,574       87,881       Oil and gas sales       224,798       176,414
670 489 Other revenues 1,188 632
112,244 88,370 Total revenues 225,986 177,046
(79,541) (55,670) Operating expenses (153,437) (109,545)
-       -      

Net gain on disposal of interests in joint
ventures

      -       2,623
(158)       1,791       Other operating income (loss)       (357)       1,750
32,545       34,491       Profit from operations       72,192       71,874
37,968       36,895       Normalized EBITDA of subsidiaries*       83,002       75,862
50,162       40,323      

Normalized EBITDA including share in
EBITDA of joint ventures*

      105,324       83,302
2,130 808 Finance income (expense) (5,116) (3,512)
13,004 3,768 Share of profit of joint ventures,
net of income tax
17,278 2,046
47,679 39,067 Profit before income tax 84,354 70,408
41,920       31,950      

Normalized profit attributable
to OAO NOVATEK shareholders*

      72,995       55,006
13.88       10.58      

Basic and diluted earnings per share
(in Russian roubles)

      24.17       18.88
13.88       10.58      

Normalized basic and diluted earnings per
share* (in Russian roubles)

      24.17       18.19

* Excluding the effect from disposal of interests in joint ventures in 1Q 2014.

In the second quarter and first half 2015, our total revenues increased by 27.0% and 27.6%, respectively, compared to the corresponding periods of 2014. The growth was mainly due to an increase in liquids sales volumes and net prices in Russian rouble terms. Average net prices of liquid hydrocarbons were positively impacted by the substantial increase in sales volumes of high value-added petroleum products from the Ust-Luga Complex, the decrease in export duty rates and rouble devaluation against the US dollar, which more than offset the decline in international hydrocarbon prices.

The Company’s Normalized EBITDA, inclusive of joint ventures, amounted to RR 50.2 billion in the second quarter 2015 and RR 105.3 billion in the first half 2015, representing an increase of 24.4% and 26.4%, respectively, as compared to the corresponding periods of 2014. Our Normalized EBITDA was positively impacted by the higher share of liquid product sold in our overall sales volumes mix.

In the second quarter 2015, the profit attributable to NOVATEK shareholders increased by 31.2% to RR 41.9 billion or RR 13.88 per share. In the first half 2015, the profit attributable to NOVATEK shareholders amounted to RR 73.0 billion (RR 24.17 per share), representing an increase of 32.7% as compared to the profit in the first half 2014 adjusted for the effect on disposal of interests in joint ventures.

In the first half 2015, our free cash flow generation increased to RR 40.4 billion, or by 2.3 times as compared to the corresponding period of 2014.

Hydrocarbon Production and Purchased Volumes

2Q 2015       2Q 2014               1H 2015       1H 2014    
16,890       15,239      

Natural gas production including
proportionate share in the production
of joint ventures, million cubic meters
(mmcm)

      33,041       30,662
12,278       13,131      

including production by subsidiaries,
mmcm

      24,739       26,529
1,615       1,375      

Natural gas purchases from joint
ventures, mmcm

      3,238       1,659
1,596       1,848       Other purchases of natural gas, mmcm       3,145       3,525
15,489       16,354      

Total natural gas production by
subsidiaries and purchases, mmcm

      31,122       31,713
2,198       1,380      

Liquids production including
proportionate share in the production
of joint ventures, thousand tons (mt)

      4,189       2,742
996       1,085       including production by subsidiaries, mt       2,052       2,179
2,184       564      

Liquids purchases from joint ventures,
mt

      3,887       1,060
17       6       Other purchases of liquids, mt       21       13
3,197       1,655      

Total liquids production by
subsidiaries and purchases, mt

      5,960       3,252

Hydrocarbon Sales Volumes

2Q 2015       2Q 2014               1H 2015       1H 2014    
14,498       15,528       Natural gas, mmcm       30,475       33,300
13,502       14,604       including sales to end-users       28,579       31,281
2,911       1,687       Liquids, mt       5,745       3,232
                including:                
1,588       1,087       Stable gas condensate products       3,425       2,052
545       43      

Stable gas condensate

      821       75
537       331       Liquefied petroleum gas       985       682
238       223       Crude oil       509       418
3       3       Other petroleum products       5       5

Our natural gas sales volumes totalled 14.5 billion cubic meters (bcm) in the second quarter 2015 and 30.5 bcm in the first half 2015, representing a decrease of 8.5% as compared to the first half 2014. The decrease was mainly due to substantial withdrawals of natural gas from the underground storages in the first half 2014 due to colder weather as compared to the first half 2015.

In the first half 2015, the total amount of natural gas recorded as inventory increased by 547 mmcm to 1,596 mmcm as compared to a decrease of 1,675 mmcm in the first half 2014.

In the second quarter 2015, liquid hydrocarbon sales volumes amounted to 2,911 mt, representing a 72.6% increase in volumes sold as compared to the second quarter 2014. In the first half 2015, liquid hydrocarbon sales volumes amounted to 5,745 mt, representing a 77.8% increase as compared to the first half 2014.

Higher volumes of gas condensate purchased from our joint ventures due to production growth at the SeverEnergia fields and launch of the Termokarstovoye field, as well as increase of crude oil production by subsidiaries positively impacted our sales during the period. As at 30 June 2015, 811 mt of liquid hydrocarbons were in transit or storage and recognized as inventory compared to 739 mt as at 31 December 2014.

Selected Balance Sheet Items

(in millions of Russian roubles)

 

      30 June 2015       31 December 2014    
ASSETS            
Non-current assets 641,485 572,548
Property, plant and equipment 312,306 291,726
Investments in joint ventures 191,620 166,231
Total current assets       129,022       126,591
Total assets       770,507       699,139
LIABILITIES AND EQUITY
Non-current liabilities 183,565 230,807
Long-term debt 156,290 204,699
Current liabilities       138,780       81,208
Total liabilities       322,345       312,015

Equity attributable to
OAO NOVATEK shareholders

446,774 384,755
Non-controlling interest 1,388 2,369
Total equity       448,162       387,124
Total liabilities and equity       770,507       699,139

The full set of consolidated interim condensed IFRS financial statements, the notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations are available on the Company’s web site (www.novatek.ru).

***

For further information, please visit www.novatek.ru or contact:

Press Service
+7 (495) 721 220 7
press@novatek.ru

 

     

Investor Relations
+7 (495) 730 6013
IR@novatek.ru

   

***

OAO NOVATEK is Russia’s largest independent gas producer and the second-largest natural gas producer in Russia. Founded in 1994, the Company is engaged in the exploration, production, processing and marketing of natural gas and liquid hydrocarbons. The Company’s upstream activities are concentrated in the prolific Yamal-Nenets Autonomous Region, which is the world’s largest natural gas producing area and accounts for approximately 80% of Russia’s natural gas production and approximately 16% of the world’s gas production. NOVATEK is an open joint stock company established under the laws of the Russian Federation. The Company’s shares are listed in Russia on Moscow Exchange (MOEX) and the London Stock Exchange (LSE) under the ticker symbol «NVTK».

Short Name: OAO Novatek
Category Code: MSC
Sequence Number: 477064
Time of Receipt (offset from UTC): 20150729T100736+0100

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OAO Novatek

Contacts

OAO Novatek