NOVATEK announces third quarter and nine months 2008 IFRS results

10 November 2008

Moscow, 10 November 2008. OAO NOVATEK today released its consolidated interim condensed financial information for the three and nine months ending 30 September 2008 prepared in accordance with International Financial Reporting Standards («IFRS»).

IFRS Financial and Operational Highlights
(in millions of Russian roubles)

3Q 2008
3Q 2007
 
9M 2008
9M 2007
 
 
Revenues
 
 
19,437
14,695
Oil and gas sales
60,015
44,130
561
413
Sales of polymer and insulation tape
1,692
1,133
465
103
Other
984
259
20,463
15,211
Total revenues
62,691
45,522
(11)
(1)
Other income (loss)
(190)
24
20,452
15,210
Total revenues and other income
62,501
45,546
(11,936)
(8,539)
Total operating expenses
(34,781)
(27,128)
8,516
6,671
Profit from operations
27,720
18,418
(976)
(19)
Finance income (expense)
(815)
46
7,506
6,670
Profit before income tax
26,804
18,482
5,686
5,118
Profit for period
20,241
13,670
5,682
5,119
Profit (loss) attributable to OAO NOVATEK shareholders
20,238
13,682
1.87
1.69
Basic and diluted earnings per share
(in Russian roubles)
6.67
4.51

In the three and nine months ended 30 September 2008, our total revenues grew by 34.5% to RR 20,463 million and by 37.8% to RR 62,691 million as compared to the corresponding periods of 2007. The increase in our total revenues reflects the general strength and stability of our core business operations.

Profit attributable to NOVATEK shareholders in the third quarter and nine months of 2008 increased by 11.0% to RR 5,682 million, or RR 1.87 per share, and by 47.9% to RR 20,238 million, or RR 6.67 per share, respectively, as compared to the corresponding periods of 2007.

Selected Operating Highlights

3Q 2008
3Q 2007
Production and Purchased Volumes
9M 2008
9M 2007
 
7,531
 
5,936
Natural gas production
(million cubic meters)
22,487
20,710
 
757
 
708
Natural gas purchases
(million cubic meters)
2,105
2,009
 
8,288
 
6,644
Total natural gas production and purchases
24,592
22,719
633
614
Liquids production (thousand tons)
1,861
1,775
24
6
Liquids purchases (thousand tons)
94
22
657
620
Total liquids production and purchases
1,955
1,797

In the third quarter 2008, our natural gas sales volumes increased due to the restoration of production levels at the East Tarkosalinskoye field and organic production growth at the Yurkharovskoye field.

Our liquids sales volumes were lower in the period due to an increase in our inventory balances as of 30 September 2008. At 30 September 2008, we had 216 thousand tons of stable gas condensate in transit or storage and recognized as inventory until such time as it is delivered to the port of destination as compared to 128 thousand tons as of 30 September 2007. During the period, we had one tanker of stable gas condensate that was delayed from discharging its cargo due to damages at the receiving port in Houston, Texas caused by Hurricane Ike. The cargo subsequently was discharged in October and will be recorded as revenues in the fourth quarter 2008.

«We are very pleased with the results achieved in the third quarter 2008 despite some challenging market conditions caused by the credit and liquidity crisis» stated Leonid v. Mikhelson, CEO NOVATEK. «We are committed to delivering results according to our strategy and have achieved a 9.2% growth in our natural gas production for the year. With the recent launch of the second phase of the Yurkharovskoye field development and the upcoming commissioning of the second stage expansion of the Purovsky processing plant, we have laid the requisite platform for the future growth of NOVATEK.»

Selected Balance Sheet Items
(in millions of Russian roubles)

 
 
30September 2008
31 December 2007
ASSETS
 
 
Non-current assets
108,990
86,937
Property, plant and equipment, net
105,091
82,669
Total current assets
29,526
17,038
Total assets
138,516
103,975
LIABILITIES AND EQUITY
 
 
Non-current liabilities
30,347
10,088
Long-term debt
19,951
42
Current liabilities
10,877
12,075
Total liabilities
41,224
22,163
Equity attributable to
OAO NOVATEK shareholders 
96,704
81,335
Minority interest
588
477
Total equity
97,292
81,812
Total liabilities and equity
138,516
103,975

The full set of consolidated interim condensed IFRS financial information, 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).


PAO NOVATEK is the largest independent natural gas producer in Russia, and in 2017, entered the global gas market by successfully launching the Yamal LNG project. 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 mainly 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 15% of the world’s gas production. NOVATEK is a public 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”.

PDF Download press release
(PDF, 55 KB)