NOVATEK announces consolidated IFRS results for third quarter and nine months 2016

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 October 2016

Moscow, 26 October 2016. PAO NOVATEK today released its consolidated interim condensed financial statements as of and for the three and nine months ended 30 September 2016 prepared in accordance with International Financial Reporting Standards (“IFRS”). 

IFRS Financial Highlights
(in millions of Russian roubles)
3Q 2016 
3Q 2015  
 
9M 2016
9M 2015
125,767 
116,212 
Oil and gas sales
390,441 
341,010 
716 
1,155 
Other revenues
2,781 
2,343 
126,483 
117,367 
Total revenues
393,222 
343,353 
(93,458)
(85,096)
Operating expenses
(280,636)
(238,533)
989 
Net gain on disposal of interests in joint ventures
73,072 
989 
707 
158 
Other operating income (loss)
(53)
(199)
33,732 
33,418 
Profit from operations
185,605 
105,610 
43,833 
37,120 
Normalized EBITDA of subsidiaries*
140,932
119,141
57,726 
52,579 
Normalized EBITDA including share in
EBITDA of joint ventures*
179,369
156,922
1,101
(6,174)
Finance income (expense)
2,091 
(11,290)
9,401
(34,713)
Share of profit (loss) of joint ventures, net of income tax
52,405 
(17,435)
44,234
(7,469)
Profit (loss) before income tax
240,101
76,885 
36,494
(12,416)
Profit (loss) attributable to PAO NOVATEK shareholders
198,345
60,579
36,494
(13,405)
Normalized profit (loss) attributable to PAO NOVATEK shareholders*
140,668
59,590
12.09
(4.44)
Normalized basic and diluted earnings (loss) per share* (in Russian roubles)
46.60
19.73
* Excluding the effect from disposal of interests in joint ventures.

Our total revenues in the third quarter and nine months 2016 increased by 7.8% and 14.5%, respectively, as compared to the corresponding periods of 2015. Our Normalized EBITDA, inclusive of joint ventures, totalled RR 57.7 billion in the third quarter 2016 and RR 179.4 billion in the nine months 2016, representing an increase of 9.8% and 14.3%, respectively, as compared to the corresponding periods of 2015. The growth in our revenues and EBITDA was largely driven by substantial increase in liquids sales volumes.

Profit attributable to NOVATEK shareholders totalled RR 36.5 billion (RR 12.09 per share) in the third quarter 2016 and RR 198.3 billion (RR 65.70 per share) in the nine months 2016.  Profit in the respective periods in 2015 were significantly impacted by foreign exchange losses, which resulted in a net loss in the third quarter 2015.

Marketable Hydrocarbon Production and Purchased Volumes 
3Q 2016 
3Q 2015  
 
9M 2016
9M 2015
16,195
17,061
Natural gas production, million cubic meters (mmcm)
49,952
50,102
11,304
11,868
including production by subsidiaries, mmcm
35,082
36,607
1,812
1,851
Natural gas purchases from joint ventures, mmcm
6,401
5,089
2,174
1,699
Other purchases of natural gas, mmcm
6,124
4,844
15,290
15,418
Total natural gas production by subsidiaries and purchases, mmcm
47,607
46,540
3,060
2,346
Liquids production,
thousand tons (mt)
9,387
6,535
1,784
969
including production by subsidiaries, mt
5,448
3,021
2,382
2,555
Liquids purchases from joint ventures, mt
7,363
6,442
42
37
Other purchases of liquids, mt
86
58
4,208
3,561
Total liquids production by subsidiaries and purchases, mt
12,897
9,521
 
Hydrocarbon Sales Volumes
3Q 2016 
3Q 2015  
 
9M 2016
9M 2015
14,456
14,272
Natural gas, mmcm
46,293
44,747
13,445
13,435
including sales to end-users
42,584
42,014
4,183
3,474
Liquids, mt
12,964
9,219
 
 
including:
 
 
1,647
1,613
Stable gas condensate products
5,212
5,038
1,157
251
Crude oil
3,502
760
715
975
Stable gas condensate
2,222
1,796
660
632
Liquefied petroleum gas
2,019
1,617
4
3
Other petroleum products
9
8

Our natural gas sales volumes totalled 14.5 billion cubic meters (bcm) in the third quarter 2016 and 46.3 bcm in the nine months 2016, representing an increase of 1.3% and 3.5%, respectively, as compared to the corresponding periods of 2015, which was mainly due to the development of gas trading at the Saint-Petersburg commodity exchange and higher volumes sold to traders. As at the end of the third quarter 2016, the total amount of natural gas recorded as inventory totalled 2.5 bcm as compared to 2.7 bcm at the end of the third quarter 2015.

In the third quarter 2016, liquid hydrocarbon sales volumes amounted to 4,183 mt, representing a 20.4% increase in volumes sold as compared to the third quarter 2015. In the nine months 2016, liquid hydrocarbon sales volumes grew to 12,964 mt, representing a 40.6% increase as compared to the nine months 2015. This significant growth was largely due to the launch of the Yarudeyskoye oil field in December 2015 and the Termokarstovoye and Yaro-Yakhinskoye gas and gas condensate fields in the first half 2015. The dynamics of our liquids sales volumes was also positively impacted by a decrease in liquids inventories by 284 mt in the nine months 2016 compared to the increase by 92 mt in the nine months 2015. As at 30 September 2016, 626 mt of liquid hydrocarbons were in transit or storage and recognized as inventory.

Selected Balance Sheet Items
(in millions of Russian roubles) 
  
 
30 September 2016
31 December 2015
ASSETS
 
 
Non-current assets
804,302
751,552
Property, plant and equipment
329,870
331,712
Investments in joint ventures
220,388
154,725
Long-term loans and receivables
223,991
230,799
Total current assets
118,559
120,485
Assets held for sale
-
7,987
Total assets
922,861
880,024
LIABILITIES AND EQUITY
 
 
Non-current liabilities
218,036
282,178
Long-term debt
183,499
252,050
Current liabilities
109,862
169,675
Total liabilities
327,898
451,853
Equity attributable to
PAO NOVATEK shareholders
 
587,365
426,079
Non-controlling interest
7,598
2,092
Total equity
594,963
428,171
Total liabilities and equity
922,861
880,024

The full set of unaudited 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 one of the largest independent natural gas producers 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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