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NOVATEK announces consolidated IFRS results for the year ended 31 December 2012

Moscow, 7 March 2013. OAO NOVATEK today released its audited consolidated financial statements for the years ended 31 December 2012 and 2011 prepared in accordance with the International Financial Reporting Standards (“IFRS”). 
 
IFRS Financial and Operational Highlights
(in millions of Russian roubles)
 
       
FY 2012
FY 2011
Oil and gas sales
210,246
174,811
Other revenues
727
462
Total revenues
210,973
175,273
Operating expenses
(125,775)
(96,820)
Gain (loss) on disposal of interests in subsidiaries
(60)
62,948
Other operating income
196
207
Profit from operations
85,334
141,608
Finance income (expense)
2,986
(2,703)
Profit before income tax
86,215
135,025
Profit
69,441
119,291
Profit attributable
to OAO NOVATEK shareholders
69,458
119,655
Adjusted profit attributable
to OAO NOVATEK shareholders*
69,518
56,707
Basic and diluted earnings per share
(in Russian roubles)
22.89
39.45
Adjusted basic and diluted earnings per share*
(in Russian roubles)
22.91
18.69
* excluding gain (loss) on disposal of interests in subsidiaries.
 
Total revenues grew by 20.4% year-on-year to RR 211.0 billion for the twelve months ended 31 December 2012 from RR 175.3 billion in 2011. The growth was due to an increase in hydrocarbon sales volumes and higher natural gas and liquids prices.
 
In 2012, profit from operations, adjusted for gain (loss) on disposal of interests in subsidiaries, amounted to RR 85.4 billion, increasing by 8.6% as compared with 2011. Profit from operations for 2011 includes the gain from the disposal of a 20% equity interest in Yamal LNG of RR 62.9 billion.
 
Profit attributable to NOVATEK shareholders, adjusted for gain (loss) on disposal of interests in subsidiaries, increased by 22.6% in 2012 to RR 69.5 billion, or by RR 22.91 per share, as compared to RR 56.7 billion, or by RR 18.69 per share in 2011.
 
 
Selected Operating Highlights
 
Production and Purchased Volumes
FY 2012
FY 2011
Natural gas production, million cubic meters (mmcm)
50,507
47,521
Natural gas purchases from joint ventures, mmcm
5,335
5,384
Other purchases of natural gas, mmcm
3,533
841
Total natural gas production and purchases, mmcm
59,375
53,746
Liquids production, thousand tons (mt)
4,193
4,111
Liquids purchases from joint ventures, mt
259
-
Other purchases of liquids, mt
38
6
Total liquids production and purchases, mt
4,490
4,117
 
 
Sales Volumes
FY 2012
FY 2011
Natural gas, mmcm
58,880
53,667
Stable gas condensate, mt
2,847
2,984
Liquefied petroleum gas, mt
905
880
Crude oil, mt
442
242
 
In 2012, natural gas sales volumes increased to 58.9 billion cubic meters (bcm), or by 9.7%, as compared with 2011, due to growth in production from our subsidiaries, which was mainly driven by the launch of the fourth stage of Phase Two development at the Yurkharovskoye field, as well as an increase in purchases of natural gas. As at 31 December 2012, the total amount of natural gas injected into underground gas storage facilities and reflected as inventory aggregated 1,096 million cubic meters (mmcm), as compared with 732 mmcm at the year-end 2011.
 
Liquid hydrocarbon sales volumes aggregated 4,203 thousand tons in 2012 increasing by 2.2% as compared with 2011. The increase is due to the commencement of gas condensate purchases from joint ventures and production growth from our subsidiaries, mainly an increase in crude oil output at the East-Tarkosalinskoye field. The growth in liquids sales volumes was constrained by a significant increase in stable gas condensate inventories due to redirection of sales to Asian-Pacific region that were in seaborne transit and not recognized as revenues in the current reporting period. As at the year-end, 461 thousand tons of stable gas condensate was in transit or storage and recognized as inventory, as compared with 228 thousand tons as at 31 December 2011.  
 
Selected Balance Sheet Items
(in millions of Russian roubles)
 
    
 
31 December 2012
31 December 2011
ASSETS
 
 
Non-current assets
404,890
325,116
Property, plant and equipment
197,376
166,784
Investments in joint ventures
189,136
123,029
Total current assets
58,243
58,316
Total assets
463,133
383,432
LIABILITIES AND EQUITY
 
 
Non-current liabilities
116,702
91,636
Long-term debt
97,805
75,180
Current liabilities
55,130
50,114
Total liabilities
171,832
141,750
Equity attributable to
OAO NOVATEK shareholders
 
290,050
241,013
Non-controlling interest
1,251
669
Total equity
291,301
241,682
Total liabilities and equity
463,133
383,432
 
The full set of audited consolidated IFRS financial statements for the years ended 31 December 2012 and 2011 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).
 
 
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. 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”.