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NOVATEK announces consolidated IFRS results for the year ended 31 December 2009
Moscow, 12 March 2010. OAO NOVATEK today released its audited consolidated financial statements for the years ended 31 December 2009 and 2008 prepared in accordance with International Financial Reporting Standards (“IFRS”).
IFRS Financial and Operational Highlights
(in millions of Russian roubles)
| FY 2009 | FY 2008 | |
|---|---|---|
| Revenues | ||
| Oil and gas sales | 86,903 | 76,076 |
| Sales of polymer and insulation tape | 1,873 | 2,098 |
| Other revenues | 1,178 | 1,098 |
| Total revenues | 89,954 | 79,272 |
| Total operating expenses | (56,130) | (46,916) |
| Net gain (loss) on disposal of interest in subsidiaries | 52 | 8 |
| Other income (loss) | (343) | (244) |
| Profit from operations | 33,533 | 32,120 |
| Finance income (expense) | (831) | (3,384) |
| Profit before income tax | 32,500 | 28,589 |
| Profit (loss) | 25,722 | 22,927 |
| Profit (loss) attributable to OAO NOVATEK shareholders | 26,043 | 22,899 |
| (in Russian roubles) | 8.59 | 7.54 |
Total revenues grew by 13.5% year-on-year to RR 89,954 million for the twelve months ended 31 December 2009 from RR 79,272 million in the corresponding period of 2008, reflecting the general strength and resiliency of our core business operations despite the difficult economic operating environment. The increase in oil and gas sales was attributable to higher domestic natural gas prices and an increase in liquid hydrocarbon volumes sold.
As a result of the higher revenues and our ability to decrease controllable costs, profit attributable to NOVATEK shareholders increased by 13.7% to RR 26,043million, or RR 8.59 per share as compared to RR 22,899million, or RR 7.54 per share for the corresponding period in 2008.
Selected Operating Highlights
| Production and Purchased Volumes | FY 2009 | FY 2008 |
|---|---|---|
| Natural gas production (million cubic meters) | 32,353 | 30,430 |
| Natural gas purchases (million cubic meters) | 1,000 | 2,885 |
| Total natural gas production and purchases | 33,353 | 33,315 |
| Liquids production (thousand tons) | 3,038 | 2,563 |
| Liquids purchases (thousand tons) | 13 | 98 |
| Total liquids production and purchases | 3,051 | 2,661 |
| Sales Volumes | FY 2009 | FY 2008 |
|---|---|---|
| Natural gas (million cubic meters) | 32,937 | 33,274 |
| Stable gas condensate (thousand tons) | 2,170 | 1,583 |
| Liquefied petroleum gas (thousand tons) | 749 | 618 |
| Crude oil (thousand tons) | 198 | 270 |
| Oil products (thousand tons) | 11 | 159 |
In 2009, total consolidated natural gas production increased by 1,923 mmcm, or 6.3%, compared to 2008 due to increased production capacity at the Yurkharovskoye field resulting from the launch of the first two stages of the field’s second phase of development in September 2008 and October 2009, respectively. The increase in our production capacity allowed us to decrease 2009 natural gas purchases by 1,885 mmcm, or 65.3%, as compared to 2008. The decrease in total 2009 natural gas sales volumes of 337 mmcm, or 1%, as compared to 2008 was mainly due to an increase in our inventory balance at underground storage facilities in 2009.
Our liquids production increased by 475 thousand tons, or 18.5%, to 3,038 thousand tons compared to 2,563 thousand tons in 2008, due to the expansion of unstable gas condensate production capacity at our Yurkharovskoye field as a result of the field’s ongoing development program. The increase in 2009 unstable gas condensate production, as well as a decrease in liquids inventory balances, allowed us to increase stable gas condensate and LPG sales volumes by 37.1% and 21.2%, respectively, compared to 2008.
At 31 December 2009, we had 111 thousand tons of stable gas condensate in transit or storage and recognized as inventory until such time as it is delivered to customers as compared to 220 thousand tons as of 31 December 2008. In 2009, our stable gas condensate in transit or storage and recognized as inventory decreased by 109 thousand tons compared to a decrease of four thousand tons in 2008.
Selected Balance Sheet Items
(in millions of Russian roubles)
| 31 December 2009 | 31 December 2008 | |
|---|---|---|
| ASSETS | ||
| Non-current assets | 166,264 | 113,578 |
| Property, plant and equipment, net | 161,448 | 108,714 |
| Total current assets | 26,867 | 25,428 |
| Assets held for sale | 508 | 901 |
| Total assets | 193,639 | 139,907 |
| LIABILITIES AND EQUITY | ||
| Non-current liabilities | 36,602 | 28,763 |
| Long-term debt | 23,876 | 19,935 |
| Current liabilities | 23,593 | 14,169 |
| Liabilities associated with assets held for sale | 4 | 335 |
| Total liabilities | 60,199 | 43,267 |
| OAO NOVATEK shareholders | 114,301 | 96,069 |
| Non-controlling interest | 19,139 | 571 |
| Total equity | 133,440 | 96,640 |
| Total liabilities and equity | 193,639 | 139,907 |
The full set of audited consolidated IFRS financial statements for the years ended 31 December 2008 and 2009 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).
Certain statements in this press release are not historical facts and are “forward looking” within the meaning of Section 27A of the Securities Act and Section 21E of the US Securities Exchange Act of 1934 (hereinafter, the Exchange Act). Forward looking statements include statements concerning our plans, expectations, projections, objectives, targets, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs, plans or intentions relating to acquisitions, our competitive strengths and weaknesses, plans or goals relating to forecasted production, reserves, financial position and future operations and development, our business strategy and the trends we anticipate in the industries and the political and legal environment in which we operate and other information that is not historical information. By their very nature, forward looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that the predictions, forecasts, projections and other forward looking statements will not be achieved.
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.