27th Nov 2012 08:02
The following replaces the KMG EP 9M 2012 financial results announcement released on 21 November under RNS number 6563R.
Changes have been made to the tables in Appendix 3.
The full correct text appears below.
PRESS - RELEASE
JSC KazMunaiGas Exploration Production
9M 2012 financial results
Astana,21 November 2012. JSC KazMunaiGas Exploration Production ("KMG EP" or "the Company") announces its condensed consolidated interim financial statements for the nine months ended September 30, 2012.
·; Revenues amounted to 605 bn Tenge (US$4,067m)[1], which is 11% higher compared to the revenues in the same period of 2011 on higher export volumes and higher domestic prices.
·; Net profit amounted to 173bn Tenge (US$1,163m) and earnings per share - 2,480 Tenge (US$2.8 per GDR), an increase of 5% and 9%, respectively, compared to the same period of 2011.
Production Highlights
In the first nine months of 2012 KMG EP produced 9,108 thousand tonnes of crude oil (246 kbopd), including the Company's stakes in Kazgermunai (KGM), CCEL and PetroKazakhstan Inc. (PKI) which is 1% less than in the same period of 2011.
JSC Uzenmunaigas (UMG) produced 3,699 thousand tonnes (99 kbopd), which is 89 thousand tonnes less than in the same period of 2011. JSC Embamunaigas (EMG) produced 2,096 thousand tonnes (56 kbopd), which is similar to the volume produced in the same period of 2011. The total volume of the oil produced at UMG and EMG is 5,795 thousand tonnes (156 kbopd).
Taking into account results of the first nine months of the year, the Company expects annual production in UMG in 2012 to be 4.9 million tonnes (99 kbopd). The Company expects that EMG will achieve its initial plan of 2.8 million tonnes. Thus, it is expected that the total volume of the oil produced at UMG and EMG in 2012 will be 7.7 million tonnes (156 kbopd).
The Company's share in the production from KGM, CCEL and PKI for the first nine months of 2012 amounted to 3,313 thousand tonnes of crude oil (91 kbopd), about the same as in the first nine months of 2011. The Company's shares in production plans of KGM, CCEL and PKI remain as 4.4 million tonnes (91 kbopd) in 2012.
Crude oil sales
In the first nine months of 2012 the Company's export and domestic sales from UMG and EMG were 4,624 thousand tonnes (12 kbopd) and 1,236 thousand tonnes (33 kbopd) respectively.
The Company's share in the sales from KGM, CCEL and PKI was 3,348 thousand tonnes of crude oil (93 kbopd), including 2,463 thousand tonnes (68 kbopd) or 74% of total sales supplied to export markets.
Net Profit for the Period
Profit after tax (net income) in the first nine months of 2012 was 173bn Tenge (US$1,163m), representing a 5% increase compared to the same period of 2011, mainly due to higher export volumes and higher prices for domestic supply, partially offset by higher employee costs and income tax expenses.
Revenues
The Company's revenues in the first nine months of 2012 amounted to 605bn Tenge (US$4,067m), which is 59bn Tenge higher compared to those of the same period of 2011. This resulted from the 6% increase in export volumes and the 36% increase in domestic selling prices, compared to the same period of 2011.
Taxes other than on Income
Taxes, other than on income, in the first nine months of 2012 were 219bn Tenge (US$1,472m), which is almost the same compared to the first nine months of 2011.
Production Expenses
Production expenses in the first nine months of 2012 were 104bn Tenge (US$698m), which is 18% higher compared to the same period of 2011. A significant part of the production costs increase is due to higher expenses on employee costs and the decrease in crude oil balance, which were partially offset by reduction in repairs and maintenance expenses due to reduction of the number of repaired wells and lower repair costs per well.
Selling, General and Administrative Expenses
Selling, general and administrative expenses in the first nine months of 2012 were 75bn Tenge (US$506m), which is 2% lower compared to the same period of 2011. The decrease is mainly due to lower expenses for penalties and fines and lower management fees to National Company Kazmunaigas, partially offset by an increase in employee costs, higher transportation expenses as a result of higher export volumes and higher expenses for social projects.
Fines and penalties
On July 12, 2012 the Tax Committee of the Ministry of Finance of the Republic of Kazakhstan completed the 2006-2008 comprehensive tax audit of the Company. As a result of the tax audit, which was commenced in October 2011, the tax authorities provided a tax assessment to the Company of 16.9bn Tenge, including 5.8bn Tenge of principal, 7.2bn Tenge of administrative fines and 4.0bn Tenge of late payment interest. The Company has begun the process of preparing an appeal to the Tax Committee of the Ministry of Finance.
Cash Flows from Operating Activities
Operating cash flow in the first nine months of 2012 was 95bn Tenge (US$640m), which is 14% lower compared to the same period of 2011. This is mainly due to increases in working capital and in income taxes paid, partially offset by an increase in revenue.
Capex
Purchases of property, plant and equipment and intangible assets (as per Cash Flow Statement) in the first nine months of 2012 were 76bn Tenge (US$513m), which is 13% higher compared to the same period of 2011.
Cash and Debt
Cash and cash equivalents as at September 30, 2012 amounted to 72bn Tenge (US$0,5bn) compared to 207bn Tenge (US$1,4bn)as at December 31, 2011.
Other financial assets (current and non-current) at September 30, 2012 were 558bn Tenge (US$3.7bn) compared to 511bn Tenge (US$3.4bn) as at December 31, 2011. Other financial assets include the NC KMG Bond, deposits and additional financial instruments. As at September 30, 2012 the outstanding amount of the Bond was 137bn Tenge (US$0.9bn).
87% of cash and financial assets (including the Bond) as at September 30, 2012 were denominated in foreign currencies and 13% were denominated in Tenge. Financial income accrued on cash and financial assets (including the Bond) in the first nine months of 2012 was 23.3bn Tenge (US$157m).
Borrowings as at September 30, 2012 were 7.5bn Tenge (US$50m), compared to 88bn Tenge (US$593m) as at December 31, 2011. In the third quarter of 2012, the Company fully repaid its non-recourse debt to KMG PKI Finance B.V. related to the acquisition of the 33% interest in PKI in December of 2009.
The net cash position[2] as at 30 September 2012 amounted to 623bn Tenge (US$4.2bn) compared to 629bn Tenge (US$4.2bn) as at 31 December 2011.
Income from associates and joint ventures
In the first nine months of 2012, KMG EP's share in income from associates and joint ventures was 63bn Tenge (US$424m), 10% lower compared to the same period of 2011. This was mainly driven by decrease of export volumes.
Kazgermunai
In the first nine months of 2012 KMG EP recognised 31bn Tenge (US$206m) of income from its share inKGM. KGM's net income increased by 3% in the reported period compared to the same period of 2011 mainly due to lower operating expenses, partially offset by decrease in the export volumes.
PetroKazakhstan Inc.
In the first nine months of 2012 KMG EP recognised 33bn Tenge (US$221m) of income from its share inPKIPKI's net income decreased by 13% in the reported period compared to the same period of 2011 mainly due to the decrease in the export volume.
CCEL
As of September 30, 2012 the Company has recognised 19bn Tenge (US$125m) as a receivable from CCEL, a jointly controlled entity with CITIC Group. The Company has accrued 2bn Tenge (US$14m) of interest income in the first nine months of 2012 related to the US$26.87m annual priority return from CCEL.
***
The condensed consolidated interim financial statements for the nine months ended September 30, 2012, the notes thereto, and the operating and financial review for the period is available on the Company's website (www.kmgep.kz).
Appendix[3]
Consolidated Interim Statement of Comprehensive Income (unaudited)
Tenge million
Three months ended September 30, | Nine months ended September 30, | ||||
2012 | 2011 | 2012 | 2011 | ||
Revenue | 206,099 | 145,689 | 604,642 | 545,747 | |
Share of results of associates and joint ventures | 22,125 | 21,185 | 63,030 | 69,764 | |
Finance income | 6,439 | 6,801 | 23,345 | 22,176 | |
Total revenue and other income | 234,663 | 173,675 | 691,017 | 637,687 | |
Production expenses | (33,087) | (25,149) | (103,820) | (87,847) | |
Selling, general and administrative expenses | (29,684) | (17,163) | (75,162) | (76,427) | |
Exploration expenses | (731) | (1,951) | (5,057) | (2,629) | |
Depreciation, depletion and amortization | (14,178) | (11,308) | (39,770) | (32,892) | |
Taxes other than on income | (74,570) | (56,128) | (218,842) | (217,999) | |
Loss on disposal of property, plant and equipment | (1,408) | (1,269) | (1,808) | (3,398) | |
Finance costs | (2,628) | (1,676) | (5,601) | (5,465) | |
Foreign exchange gain, net | 2,235 | 5,467 | 6,491 | 732 | |
Profit before tax | 80,612 | 64,498 | 247,448 | 211,762 | |
Income tax expense | (29,241) | (14,187) | (74,612) | (47,113) | |
Profit for the period | 51,371 | 50,311 | 172,836 | 164,649 | |
Exchange difference on translating foreign operations | 883 | 2,282 | 2,387 | 1,471 | |
Other comprehensive gain for the period, net of tax | 883 | 2,282 | 2,387 | 1,471 | |
Total comprehensive income for the period, net of tax | 52,254 | 52,593 | 175,223 | 166,120 | |
EARNINGS PER SHARE - Tenge thousands | |||||
Basic and diluted | 0.74 | 0.70 | 2.48 | 2.28 | |
Consolidated Interim Statement of Cash Flows (unaudited)
Tenge million
Nine months ended September 30, | ||
2012 | 2011 | |
Cash flows from operating activities | ||
Profit before tax | 247,448 | 211,762 |
Adjustments to add / (deduct) non-cash items | ||
Depreciation, depletion and amortisation | 39,770 | 32,892 |
Share of result of associates and joint ventures | (63,030) | (69,764) |
Loss on disposal of property, plant and equipment (PPE) | 1,808 | 3,398 |
Impairment of PPE and intangible assets | 508 | 1,544 |
Dry well expense on exploration and evaluation assets | 3,736 | 816 |
Recognition of share-based payments | 266 | 312 |
Unrealised foreign exchange gain on non-operating activities | (5,566) | (2,315) |
Other non-cash income and expense | 1,677 | 4,755 |
Add finance costs | 5,601 | 5,465 |
Deduct finance income relating to investing activity | (23,345) | (22,176) |
Working capital adjustments | ||
Change in other assets | 175 | (550) |
Change in inventories | 4,614 | (2,791) |
Change in taxes prepaid and VAT recoverable | (14,026) | 600 |
Change in prepaid expenses | (3,929) | 13,942 |
Change in trade and other receivables | (56,993) | (8,927) |
Change in trade and other payables | 18,509 | (8,350) |
Change in mineral extraction and rent tax payable | 3,073 | (4,800) |
Change in provisions | 8,560 | 7,059 |
Income tax paid | (73,777) | (52,895) |
Net cash generated from operating activities | 95,079 | 109,977 |
Cash flows from investing activities | ||
Purchases of PPE | (67,666) | (57,828) |
Proceeds from sale of PPE | 825 | 655 |
Purchases of intangible assets | (8,645) | (9,643) |
Acquisition of share in a joint venture | - | (23,907) |
Loans provided to a joint venture | (1,724) | (1,206) |
Dividends received from joint ventures and associates | 66,153 | 55,919 |
Interest received from investment in Debt Instruments of NC KMG | 6,586 | 6,462 |
(Purchase) / sale of financial assets held-to-maturity | (92,036) | 28,911 |
Proceeds from sale of other financial assets | 5,546 | - |
Repayments of loans receivable from related parties | 2,856 | - |
Deferred payment for acquisition of subsidiary | - | (416) |
Interest received | 2,345 | 3,701 |
Net cash (used in) / generated from investing activities | (85,760) | 2,648 |
Cash flows from financing activities | ||
Share buy back | (25,399) | (10,328) |
Repayment of borrowings | (81,129) | (34,957) |
Dividends paid to Company's shareholders | (33,886) | (19,210) |
Interest paid | (2,975) | (4,665) |
Net cash used in financing activities | (143,389) | (69,160) |
Net change in cash and cash equivalents | (134,070) | 43,465 |
Cash and cash equivalents at the beginning of the year | 206,512 | 98,520 |
Exchange (losses) / gains on cash and cash equivalents | (4) | 720 |
Cash and cash equivalents at the end of the period | 72,438 | 142,705 |
Consolidated Interim Statement of Financial Position
Tenge million
September 30, 2012 | December 31, 2011 | |
Unaudited | Audited | |
ASSETS | ||
Non-current assets | ||
Property, plant and equipment | 376,806 | 338,860 |
Intangible assets | 24,852 | 26,638 |
Investments in joint ventures | 95,025 | 116,526 |
Investments in associates | 153,243 | 133,228 |
Receivable from a jointly controlled entity | 17,597 | 18,138 |
Loan receivable from a joint venture | 10,397 | 8,494 |
Other financial assets | 1,068 | 188,803 |
Deferred tax asset | 13,338 | 9,450 |
Other assets | 12,652 | 19,593 |
Total non-current assets | 704,978 | 859,730 |
Current assets | ||
Inventories | 18,215 | 22,651 |
Income taxes prepaid | - | 9,971 |
Taxes prepaid and VAT recoverable | 36,763 | 22,738 |
Prepaid expenses | 15,984 | 12,054 |
Trade and other receivables | 141,558 | 84,126 |
Receivable from a jointly controlled entity | 1,136 | 1,361 |
Other financial assets | 556,970 | 321,890 |
Cash and cash equivalents | 72,438 | 206,512 |
Total current assets | 843,064 | 681,303 |
Total assets | 1,548,042 | 1,541,033 |
EQUITY | ||
Share capital | 173,751 | 198,452 |
Other capital reserves | 2,390 | 2,124 |
Retained earnings | 1,166,348 | 1,083,749 |
Other components of equity | 16,741 | 14,354 |
Total equity | 1,359,230 | 1,298,679 |
LIABILITIES | ||
Non-current liabilities | ||
Borrowings | 4,999 | 33,034 |
Deferred tax liability | 1,731 | 2,049 |
Provisions | 41,122 | 37,846 |
Total non-current liabilities | 47,852 | 72,929 |
Current liabilities | ||
Borrowings | 2,497 | 54,931 |
Income taxes payable | 2,281 | - |
Mineral extraction tax and rent tax payable | 53,981 | 50,908 |
Trade and other payables | 68,213 | 48,680 |
Provisions | 13,988 | 14,906 |
Total current liabilities | 140,960 | 169,425 |
Total liabilities | 188,812 | 242,354 |
Total liabilities and equity | 1,548,042 | 1,541,033 |
The following tables show the Company's realised sales prices adjusted for oil and oil products transportation and other expenses for the first nine months of 2012 and 2011.
9M 2012, (US$/bbl) | UAS | CPC | Domestic |
Benchmark end-market quote[4] | 112.24 | 112.24 | - |
Sales price | 109.17 | 109.97 | 35.06 |
Quality bank | - | (7.32) | - |
Premium of bbl difference | 0.15 | 8.82 | - |
Realised price[5] | 109.32 | 111.47 | 35.06 |
Rent tax | (23.73) | (24.03) | - |
Export customs duty | (5.46) | (4.98) | - |
Transportation | (7.55) | (7.14) | (1.05) |
Sales commissions | (0.03) | (0.03) | - |
Adjusted realised price | 72.55 | 75.29 | 34.01 |
9M 2011, (US$/bbl) | UAS | CPC | Domestic |
Benchmark end-market quote4 | 111.89 | 111.89 | - |
Sales price | 106.15 | 110.40 | 26.31 |
Quality bank | - | (9.28) | - |
Premium of bbl difference | (0.12) | 9.34 | - |
Realised price5 | 106.03 | 110.46 | 26.31 |
Rental tax | (24.78) | (24.84) | - |
Export customs duty | (5.10) | (5.10) | - |
Transportation | (7.70) | (7.55) | (1.36) |
Sales commissions | (0.07) | (0.07) | - |
Adjusted realised price | 68.38 | 72.90 | 24.95 |
Reference information | 9M 2012 | 9M 2011 |
Average exchange US$/KZT rate | 148.66 | 146.19 |
End of period US$/KZT rate | 149.86 | 147.87 |
Coefficient barrels to tonnes for KMG EP crude | 7.36 | |
Coefficient barrels to tonnes for Kazgermunai crude | 7.70 | |
Coefficient barrels to tonnes for CCEL crude | 6.68 | |
Coefficient barrels to tonnes for PKI crude | 7.75 | |
Notes for Editors
KMG EP is among the top three Kazakh oil and gas producers. Its overall production in 2011 was 12.3mt (an average of 250 kbopd) of crude oil, including the Company's share in Kazgermunai, CCEL and PKI. The total volume of proved and probable reserves, as at the end of 2011, was 226mt (1.7bn bbl), including shares in the associates of about 2.1 bn barrels. The Company's shares are listed on the Kazakhstan Stock Exchange and the GDRs are listed on the London Stock Exchange. The Company raised over US$2bn in its IPO in September 2006. The international rating agency Standard & Poor's (S&P) confirmed KMG EP's "BBB-" corporate credit rating in December 2011.
For further details please contact:
Investor Relations (+7 7172 97 54 33)
Asel Kaliyeva
E-mail: [email protected]
Public Relations (+7 7172 97 79 15)
Zhuldyz Dzhumadilova
E-mail: [email protected]
Forward-looking statements
This document includes statements that are, or may be deemed to be, ''forward-looking statements''. These forward-looking statements can be identified by the use of forward-looking terminology including, but not limited to, the terms ''believes'', ''estimates'', ''anticipates'', ''expects'', ''intends'', ''may'', ''target'', ''will'', or ''should'' or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward-looking statements include all matters that are not historical facts. They include, but are not limited to, statements regarding the Company's intentions, beliefs and statements of current expectations concerning, amongst other things, the Company's results of operations, financial condition, liquidity, prospects, growth, potential acquisitions, strategies and as to the industries in which the Company operates. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances that may or may not occur. Forward-looking statements are not guarantees of future performance and the actual results of the Company's operations, financial condition and liquidity and the development of the country and the industries in which the Company operates may differ materially from those described in, or suggested by, the forward-looking statements contained in this document. The Company does not intend, and does not assume any obligation, to update or revise any forward-looking statements or industry information set out in this document, whether as a result of new information, future events or otherwise. The Company does not make any representation, warranty or prediction that the results anticipated by such forward-looking statements will be achieved.
[1] Amounts shown in US dollars ("US$" or "$") have been translated solely for the convenience of the reader at the average rate over the applicable period for information derived from the consolidated statements of income and consolidated statements of cash flows and the end of the period rate for information derived from the consolidated balance sheets (average rates for 9M12 and 9M11 was 148.66 and 146.19 Tenge/US$, respectively; period-end rates at September 30, 2012 and December 31, 2011 was 149.86 and 148.40 Tenge/US$, respectively).
[2] Cash, cash equivalents and other financial assets (including the Bond) less borrowings.
[3] Rounding adjustments have been made in calculating some of the financial information included in the Appendix. As a result, figures shown as total in some tables may not be exact arithmetic aggregations of the figures that precede them.
[4] The Brent (DTD) quoted price is used as benchmark
[5] Average realized price converted at 7.23 barrels per tonne of crude oil
Related Shares:
Kazmunaigaz Exploration