NOVATEK announces second quarter and first half 2012 IFRS results

10 August 2012

Moscow, 10 August 2012. OAO NOVATEK today released its consolidated interim condensed financial information for the three and six months ended 30 June 2012 prepared in accordance with International Financial Reporting Standards (“IFRS”).  
 
 
IFRS Financial and Operational Highlights
(in millions of Russian roubles unless otherwise stated)
 
2Q 2012
2Q 2011
 
1H 2012
1H 2011
 
 
Revenues
 
 
44,984
40,551
Oil and gas sales
99,136
85,377
161
75
Other revenues
382
143
45,145
40,626
Total revenues
99,518
85,520
(26,780)
(22,474)
Total operating expenses
(58,631)
(45,917)
(36)
(80)
Other operating income (loss)
5
(27)
18,329
18,072
Profit from operations
40,892
39,576
(5,597)
1,073
Total finance income (expense)
27
3,811
12,211
18,069
Profit before income tax
39,407
41,701
9,657
14,215
Profit (loss)
30,896
32,931
9,663
14,336
Profit (loss) attributable to shareholders of OAO NOVATEK
30,908
33,105
3.18
4.73
Basic and diluted earnings per share
(in Russian roubles)
10.19
10.91
 
 
Total revenues in the second quarter and first half 2012 increased by 11.1% and 16.4%, respectively, as compared to the corresponding periods in 2011, primarily due to higher natural gas and liquid hydrocarbons’ sales volumes.  
 
Profit from operations increased by 1.4% and 3.3% in the second quarter and first half 2012, respectively, compared to the corresponding periods in 2011.  Profit attributable to shareholders of OAO NOVATEK in the second quarter and first half 2012, decreased by 32.6% and 6.6%, resulting in earnings per share of RR 3.18 and RR 10.19, respectively, primarily due to non-cash foreign exchange losses in the amount of RR 5,299 million in the second quarter 2012 as compared to a non-cash gain of RR 766 million in the prior reporting period.
 
Profit attributable to shareholders of OAO NOVATEK in the second quarter 2012, excluding the effect of foreign exchange loss, increased to RR 14,962 million, or 10.3%, from RR 13,570 million in the corresponding period in 2011.
 
Selected Operating Highlights
 
2Q 2012
2Q 2011
Production and Purchase Volumes
1H 2012
1H 2011
12,458
10,696
Natural gas production,
million cubic meters (mmcm)
25,503
22,635
1,268
1,313
Equity share in natural gas production from joint ventures, mmcm
2,677
2,684
800
-
Natural gas purchases, mmcm
1,700
-
14,526
12,009
Total natural gas production and purchases, mmcm
29,880
25,319
1,027
1,036
Liquids production, thousand tons
2,107
2,060
58
-
Liquids purchases from joint ventures, thousand tons
58
-
3
2
Liquids purchases, thousand tons
5
3
1,088
1,038
Total liquids production and purchases
2,170
2,063
  
  
  
 
  
  
2Q 2012
2Q 2011
Sales Volumes
1H 2012
1H 2011
13,447
11,830
Natural gas, millions cubic meters
29,497
25,822
794
755
Stable gas condensate, thousand tons
1,418
1,479
224
217
Liquefied petroleum gas, thousand tons
462
446
101
53
Crude oil, thousand tons
185
102
 
 
 In the second quarter and first half 2012, our natural gas sales volumes increased by 13.7% and 14.2%, respectively, compared to the corresponding periods in 2011. The increases were primarily due to the growth in NOVATEK’s production capacity combined with purchases of natural gas from the Company’s joint venture and other parties. At 30 June 2012, we recorded 1,050 million cubic meters of natural gas as inventory in underground storage as compared to 203 million cubic meters in the corresponding period.
 
In the second quarter 2012, our total liquids’ sales volumes increased by 9.2% compared to the corresponding periods in 2011, primarily due to an increase in liquid production from the East Tarkosalinskoye field and purchases of unstable gas condensate purchases from OOO SeverEnergia, our joint venture, after the launch of the first stage development at the Samburgskoye field in April 2012 as well as a decrease in liquids inventory balance.  In first half 2012, our total liquids’ sales volumes increased by 1.9% compared to the corresponding period in 2011 due to gas condensate purchases and increase in total liquids production. 
 
 
 Selected Balance Sheet Items
(in millions of Russian roubles)
 

    
 
30 June 2012
31 December 2011
ASSETS
  
  
Non-current assets
340,952
325,116
Property, plant and equipment, net
181,229
166,784
Current assets
44,947
58,316
Total assets
385,899
383,432
LIABILITIES AND EQUITY
 
 
Non-current liabilities
87,813
91,636
Long-term debt
70,816
75,180
Current liabilities
35,560
50,114
Total liabilities
123,373
141,750
Equity attributable to
OAO NOVATEK shareholders
 
261,372
241,013
Non-controlling interest
1,154
669
Total equity
262,526
241,682
Total liabilities and equity
385,899
383,432

 
The full set of unaudited IFRS consolidated interim condensed 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 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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