Press Releases and Events
NOVATEK announces third quarter and nine months 2009 IFRS results
Moscow, 13 November 2009. OAO NOVATEK today released its consolidated interim condensed financial information for the three and nine months ending 30 September 2009 prepared in accordance with International Financial Reporting Standards (“IFRS”).
IFRS Financial and Operational Highlights
(in millions of Russian roubles)
| 3Q 2009 | 3Q 2008 | 9M 2009 | 9M 2008 | |
|---|---|---|---|---|
| Revenues | ||||
| 21,217 | 19,437 | Oil and gas sales | 59,909 | 60,015 |
| 475 | 561 | Sales of polymer and insulation tape | 1,373 | 1,692 |
| 279 | 465 | Other revenues | 818 | 984 |
| 21,971 | 20,463 | Total revenues | 62,100 | 62,691 |
| (13,638) | (11,936) | Total operating expenses | (40,055) | (34,781) |
| - | - | Net gain (loss) on disposal of interest in subsidiaries | 52 | - |
| 25 | (11) | Other income (loss) | (128) | (190) |
| 8,358 | 8,516 | Profit from operations | 21,969 | 27,720 |
| 903 | (976) | Finance income (expense) | (902) | (815) |
| 9,238 | 7,506 | Profit before income tax | 21,039 | 26,804 |
| 7,277 | 5,686 | Profit (loss) | 16,579 | 20,241 |
| 7,353 | 5,682 | Profit (loss) attributable to OAO NOVATEK shareholders | 16,665 | 20,238 |
| 2.43 | 1.87 | (in Russian roubles) | 5.50 | 6.67 |
In the third quarter 2009, our total revenues grew by 7.4% to RR 21,971 million compared to the corresponding period of 2008, primarily due to an increase in both natural gas prices and stable gas condensate and LPG sales volumes.
Profit attributable to NOVATEK shareholders in the third quarter increased by 29.4%, to RR 7,353 million, or RR 2.43 per share, as compared to the corresponding period in 2008, and was primarily due to higher revenues and a non cash foreign exchange gain during the 2009 period, as well as a decrease in the statutory tax rate from 24% in 2008 to 20% effective as of 1 January 2009.
In the nine months ended 30 September 2009, our total revenues decreased marginally to RR 62,100 million as compared to the corresponding period in 2008. The marginal decrease in revenues was primarily due to significantly higher prices for liquids sales volumes in both international and domestic markets in the 2008 period, which were offset by higher natural gas prices and an increase in liquid sales volumes during the 2009 period.
Profit attributable to NOVATEK shareholders in the nine months ended 30 September 2009 decreased by 17.7% to RR 16,665 million, or RR 5.50 per share, due to the higher liquids prices in the 2008 period, which were offset by higher liquids volumes in the 2009 period and an increase in transportation expense in the 2009 period due to a change in the sales mix of our natural gas customers from ex-field to end-customer sales.
Selected Operating Highlights
| 3Q 2009 | 3Q 2008 | Production and Purchased Volumes | 9M 2009 | 9M 2008 |
|---|---|---|---|---|
| 7,756 | 7,531 | (million cubic meters) | 23,492 | 22,487 |
| 250 | 757 | (million cubic meters) | 699 | 2,105 |
| 8,006 | 8,288 | Total natural gas production and purchases | 24,191 | 24,592 |
| 738 | 633 | Liquids production (thousand tons) | 2,206 | 1,861 |
| 6 | 24 | Liquids purchases (thousand tons) | 6 | 94 |
| 744 | 657 | Total liquids production and purchases | 2,212 | 1,955 |
| 3Q 2009 | 3Q 2008 | Sales Volumes | 9M 2009 | 9M 2008 |
|---|---|---|---|---|
| 7,763 | 8,226 | Natural gas (million cubic meters) | 24,030 | 24,596 |
| 467 | 329 | Stable gas condensate (thousand tons) | 1,518 | 1,153 |
| 189 | 153 | Liquefied petroleum gas (thousand tons) | 533 | 461 |
| 48 | 63 | Crude oil (thousand tons) | 149 | 212 |
| 3 | 32 | Oil products (thousand tons) | 9 | 99 |
In the third quarter and nine months of 2009, our natural gas sales volumes decreased by 5.6% and 2.3%, respectively, primarily due to a reduction in our purchases from third parties, as a result of our ability to meet domestic market demand from our own production, and an increase in natural gas inventories, whereas our liquids sales volumes grew by 22.5% and 14.8%, respectively, primarily due to the increase in unstable gas condensate production at our Yurkharovskoye field.
At 30 September 2009, we had 202 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 as compared to 216 thousand tons as of 30 September 2008. We also recorded 503 million cubic meters of natural gas as inventory at 30 September 2009 compared to 267 million cubic meters as of 30 June 2009.
“Our third quarter results continue to demonstrate our ability to adapt to difficult market conditions and capitalize on our operational strengths” stated Leonid V. Mikhelson, CEO NOVATEK. “Throughout 2009, we have shown that the timely investments in infrastructure and production capacity over the past few years allowed us to continue to grow our business and deliver sustainable value to our shareholders”
Selected Balance Sheet Items
(in millions of Russian roubles)
| 30 September 2009 | 31 December 2008 | |
|---|---|---|
| ASSETS | ||
| Non-current assets | 165,073 | 113,578 |
| Property, plant and equipment, net | 159,789 | 108,714 |
| Total current assets | 18,130 | 25,428 |
| Total assets | 183,203 | 139,907 |
| LIABILITIES AND EQUITY | ||
| Non-current liabilities | 30,995 | 28,763 |
| Long-term debt | 17,986 | 19,935 |
| Current liabilities | 24,938 | 14,169 |
| Total liabilities | 55,933 | 43,267 |
| OAO NOVATEK shareholders | 107,896 | 96,069 |
| Non-controllinginterest | 19,374 | 571 |
| Total equity | 127,270 | 96,640 |
| Total liabilities and equity | 183,203 | 139,907 |
The full set of consolidated interim condensed IFRS 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).
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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.