NOVATEK announces consolidated IFRS results for the year ended 31 December 2015

Mark Gyetvay, Deputy Chairman of the Management Board
Alexander Nazarov, Head of IR
+7 (495) 730-6013
ir@novatek.ru

 

Maria Dokuchaeva, Press-secretary
+7 (495) 721-2207
press@novatek.ru

 

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26 February 2016

Moscow, 26 February 2016. OAO NOVATEK today released its audited consolidated financial statements for the year ended 31 December 2015 prepared in accordance with the International Financial Reporting Standards (“IFRS”).  

IFRS Financial Highlights
(in millions of Russian roubles)
 
  FY 2015 FY 2014
Oil and gas sales
472,007
355,673
Other revenues
3,318
1,970
Total revenues
475,325
357,643
Operating expenses
(335,042)
(236,512)
Net gain on disposal of interests in joint ventures
989
2,623
Other operating income (loss)
(542)
4,009
Profit from operations*
139,741
125,140
Normalized EBITDA of subsidiaries*
160,800
140,371
Normalized EBITDA including share in EBITDA of joint ventures*
214,466
159,631
Finance expense
(16,182)
(46,745)
Share of loss of joint ventures,
net of income tax
(31,607)
(28,175)
Profit before income tax
92,941
52,843
Profit attributable
to shareholders of OAO NOVATEK
74,396
37,296
Adjusted profit** attributable
to shareholders of OAO NOVATEK
135,049
104,789
Adjusted basic and diluted earnings per share** (in Russian roubles)
44.71
34.67
* Excluding net gain on disposal of interests in joint ventures.
** Excluding net gain on disposal of interests in joint ventures, as well as foreign exchange gain (loss) and change in fair value of non-commodity financial instruments (including at the joint ventures level)

 

For the twelve months ended 31 December 2015, total revenues increased  by 32.9% year-on-year to RR 475.3 billion largely due to a record increase in liquids sales volumes, growth in natural gas sales prices, as well as an increase in liquids net sales prices in rouble terms driven by higher US dollar to Russian rouble exchange rate and lower export duty rates.

In 2015, we recorded a year-on-year increase of 34.4% in the Company’s Normalized EBITDA, including our respective share in the EBITDA of joint ventures, which totaled RR 214.5 billion. The growth in our Normalized EBITDA was positively impacted by a higher share of liquid hydrocarbons in our overall sales volumes mix, as well as an increase in sales volumes of high value-added petroleum products from the Ust-Luga Complex.

Profit attributable to NOVATEK shareholders increased twofold to RR 74.4 billion, as compared to RR 37.3 billion in 2014. The amount of profit and its dynamics were significantly impacted by the foreign exchange effect and the change in fair value of non-commodity financial instruments (including at the joint ventures level), as well as the effect of disposal of interests in joint ventures. Net of these effects, our adjusted profit attributable to NOVATEK shareholders in 2015 and 2014 totaled RR 135.0 billion and RR 104.8 billion respectively, representing a year-on-year increase of 28.9%. 

Our free cash flow increased by 67.2% to RR 82.3 billion as a result of operating cash flow growth by 19.4% and a decrease in cash used for capital expenditures by 18.5% as compared to 2014.

 
Production and Purchased Volumes
 
  FY 2015 FY 2014
Natural gas production including proportionate share in the production of joint ventures, million cubic meters (mmcm)
67,905
62,129
   including natural gas production by subsidiaries, mmcm
49,172
52,598
Natural gas purchases from joint ventures, mmcm
7,152
5,402
Other purchases of natural gas, mmcm
6,626
7,165
Total natural gas production by subsidiaries and purchases, mmcm
62,950
65,165
 
Liquids production including proportionate share in the production of joint ventures, thousand tons (mt)
9,094
6,036
   including liquids production by subsidiaries, mt
4,198
4,340
Liquids purchases from joint ventures, mt
9,045
3,180
Other purchases of liquids, mt
94
49
Total liquids production by subsidiaries and purchases, mt
13,337
7,569
 
Hydrocarbon Sales Volumes
 
  FY 2015 FY 2014
Natural gas, mmcm
62,465
67,231
   including sales to end-users, mmcm
58,054
63,281
Liquids, mt
12,888
7,089
   including:
 
 
   Gas condensate refined products
6,693
4,438
   Stable gas condensate
2,786
303
   Liquefied petroleum gas
2,306
1,434
   Crude oil
1,090
903
   Other oil products
13
11

In 2015, our natural gas sales volumes totaled 62.5 bcm as compared to 67.2 bcm in 2014. Lower natural gas sales volumes were mainly a result of warmer weather conditions in 2015 compared to 2014, as well as one of our major customers not taking temporarily its full contracted volumes due to technical reasons. As at 31 December 2015, the total amount of natural gas recorded as inventory aggregated 1.3 bcm.

Our liquid hydrocarbon sales volumes amounted to a record high of 12.9 million tons, representing an 81.8% increase as compared to 2014.  The significant increase was due to production growth at the Arcticgas fields, the launch of the Termokarstovoye field and an increase of crude oil production by subsidiaries. As at 31 December 2015, 910 thousand tons of liquid hydrocarbons were in transit or storage and recognized as inventory. 

Selected Balance Sheet Items
(in millions of Russian roubles)
 
 
 
31 December 2015
31 December 2014
ASSETS
 
 
Non-current assets
751,552
572,548
Property, plant and equipment
331,712
291,726
Investments in joint ventures
154,725
166,231
Long-term loans and receivables
230,799
94,142
Total current assets
120,485
126,591
Assets held for sale
7,987
-
Total assets
880,024
699,139
LIABILITIES AND EQUITY
 
 
Non-current liabilities
282,178
230,807
Long-term debt
252,050
204,699
Current liabilities
169,675
81,208
Total liabilities
451,853
312,015
Equity attributable to
OAO NOVATEK shareholders
 
426,079
384,755
Non-controlling interest
2,092
2,369
Total equity
428,171
387,124
Total liabilities and equity
880,024
699,139

The full set of audited consolidated IFRS financial statements for the year ended 31 December 2015 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 website (www.novatek.ru).


PAO NOVATEK is the largest independent natural gas producer in Russia, and in 2017, entered the global LNG 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. Upstream activities of the Company’s subsidiaries and joint ventures 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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