NOVATEK announces consolidated IFRS results for the year ended 31 December 2007

21 April 2008

Moscow, 21 April 2008. OAO NOVATEK today released its audited consolidated financial statements for the year ended 31 December 2006, 2007 prepared in accordance with International Financial Reporting Standards («IFRS»).

IFRS Financial and Operational Highlights

in millions of Russian roubles
FY 2007
FY 2006
Revenues
Oil and gas sales
60,357
48,047
Sales of polymer and insulation tape
1,602
1,109
Other
362
217
Total revenues
62,321
49,373
Other income (loss)
110
(139)
Total revenues and other income
62,431
49,234
Total operating expenses
(37,066)
(30,081)

Profit from operations
25,365
19,153
Finance income (expense)
124
(31)

Profit before income tax
25,489
19,122
Profit for the year
18,728
14,007
Profit (loss) attributable to OAO NOVATEK shareholders
18,736
14,079
Basic and diluted earnings per share(1)
(in Russian roubles)
6,17
4,64

Total revenues grew by 26.8% year-on-year to RR 62,431 million for the twelve months ended 31 December 2007 from RR 49,234 million in the corresponding period of 2006, reflecting the general strength of our core business operations. The increase in total revenues from our primary business operations was attributable to the favorable pricing environment for both domestic and international hydrocarbon sales.

Profit attributable to NOVATEK shareholders increased by 33.1% to RR 18,736 million, or RR 6.17 per share as compared to RR 14,079 million, or RR 4.64 per share for the corresponding period in 2006.

Selected Operating Highlights

Sales Volumes
FY 2007
FY 2006
Natural gas (millions cubic meters)
32,054
30,308
Stable gas condensate
(thousand tons)
1,508
1,358
Liquefied petroleum gas
(thousand tons)
554
505
Crude oil (thousand tons)
269
305
Oil products (thousand tons)
73
81

Sales volumes of natural gas for the full year increased by 1,746 million cubic meters, or by 5.8%, from 30,308 million cubic meters in 2006 to 32,054 million cubic meters in 2007. Net liquid sales volumes increased by 6.9% from 2,249 thousand tons in 2006 to 2,404 thousand tons in 2007.

At 31 December 2007, we had 224 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 compared to 190 thousand tons as of 31 December 2006. Our stable gas condensate in transit or storage and recognized as inventory increased by 34 thousand tons as at 31 December 2007 as compared to the inventory balance at 1 January 2007, while in 2006 the inventory balance increased by 179 thousand tons. The remaining change in liquids inventory balances related to changes in other liquid products.

Selected Balance Sheet Items

(in millions of Russian roubles)
31 December 2007
31 December 2006
ASSETS
Non-current assets
86,937
68,839
Property, plant and equipment, net
82,669
66,734
Total current assets
17,038
15,487
Total assets
103,975
84,326
LIABILITIES AND EQUITY
Non-current liabilities
10,088
10,552
Long-term debt
42
543
Current liabilities
12,075
5,098
Total liabilities
22,163
15,650
Equity attributable to
OAO NOVATEK shareholders
81,335
68,320
Minority interest
477
356
Total equity
81,812
68,676
Total liabilities and equity
103,975
84,326

The full set of audited consolidated IFRS financial statements for the year ended 31 December 2006 and 2007 and the related notes thereto as well as 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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