NOVATEK announces consolidated IFRS resultsfor second quarter and first half 2015

29 July 2015

Moscow, 29 July2015 . 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 20152Q 2014 1H 20151H 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)

ASSETS30 June 201531 December 2014
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-controllinginterest
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 ).

 


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”.

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