28th Oct 2015 10:30
NOVATEK announces consolidated IFRS results
for third quarter and nine months 2015
Moscow, 28 October 2015. OAO NOVATEK (“NOVATEK” or the “Company”) today released its consolidated interim condensed financial statements as of and for the three and nine months ended 30 September 2015 prepared in accordance with International Financial Reporting Standards (“IFRS”).
IFRS Financial Highlights
(in millions of Russian roubles, except for per share amounts)
| 3Q 2015 | 3Q 2014 | 9M 2015 | 9M 2014 | ||||||
| 116,212 | 84,090 | Oil and gas sales | 341,010 | 260,504 | |||||
| 1,155 | 643 | Other revenues | 2,343 | 1,275 | |||||
| 117,367 | 84,733 | Total revenues | 343,353 | 261,779 | |||||
| (85,096) | (55,870) | Operating expenses | (238,533) | (165,415) | |||||
| 989 | - | Net gain on disposal of interestsin joint ventures | 989 | 2,623 | |||||
| 158 | 100 | Other operating income (expense) | (199) | 1,850 | |||||
| 33,418 | 28,963 | Profit from operations | 105,610 | 100,837 | |||||
| 37,115 | 34,129 | Normalized* EBITDA of subsidiaries | 120,117 | 109,991 | |||||
| 52,574 | 38,757 | Normalized* EBITDA including share in EBITDA of joint ventures | 157,898 | 122,059 | |||||
| (6,174) | (6,019) | Finance expense | (11,290) | (9,531) | |||||
| (34,713) | (11,777) | Share of loss of joint ventures,net of income tax | (17,435) | (9,731) | |||||
| (7,469) | 11,167 | Profit (loss) before income tax | 76,885 | 81,575 | |||||
| (13,405) | 7,627 | Normalized* profit (loss) attributableto OAO NOVATEK shareholders | 59,590 | 62,633 | |||||
| 31,904 | 24,258 | Normalized* profit attributableto OAO NOVATEK shareholders, excluding FX effect | 96,505 | 80,040 | |||||
| 10.56 | 8.03 | Normalized* basic and diluted earnings (loss) per share, excluding FX effect (in Russian roubles) | 31.95 | 26.48 |
* Excluding the effect from disposal of interests in joint ventures.
In the third quarter and first nine months 2015, our total revenues increased by 38.5% and 31.2%, respectively, compared to the corresponding periods of 2014, which was mainly due to an increase in liquids sales volumes and prices for natural gas sales.
The Company’s Normalized EBITDA, inclusive of share in EBITDA of joint ventures, amounted to RR 52.6 billion in the third quarter 2015 and RR 157.9 billion in the first nine months 2015, representing an increase of 35.7% and 29.4%, respectively, as compared to the corresponding periods of 2014. Our Normalized EBITDA was positively impacted by the higher share of liquid product sold in our overall sales volumes mix.
In the first nine months 2015, Normalized Profit attributable to NOVATEK shareholders, totaled RR 59.6 billion (including a loss of RR 13.4 billion in the third quarter 2015) and decreased by 4.9% as compared to RR 62.6 billion in the first nine months 2014.
Our profit dynamics were negatively impacted by the devaluation of the Russian rouble against the US dollar and Euro, which resulted in non-cash foreign exchange losses due to revaluation of the foreign currency debt of NOVATEK and our joint ventures, mainly Yamal LNG. The revaluation does not negatively impact the profitability and financial performance of our business given the currency structure of NOVATEK and our joint ventures cash flows. Net of the foreign exchange effects, our Normalized Profit attributable to NOVATEK shareholders in the third quarter and first nine months 2015 increased by 31.5% and 20.6% respectively compared to the corresponding periods of 2014.
Marketable Hydrocarbon Production and Purchased Volumes
| 3Q 2015 | 3Q 2014 | 9M 2015 | 9M 2014 | ||||||
| 17,061 | 15,196 | Natural gas production including proportionate share in the production of joint ventures, million cubic meters (mmcm) | 50,102 | 45,858 | |||||
| 11,868 | 12,901 | including production by subsidiaries, mmcm | 36,607 | 39,430 | |||||
| 1,851 | 1,270 | Natural gas purchases from joint ventures, mmcm | 5,089 | 2,929 | |||||
| 1,699 | 1,815 | Other purchases of natural gas, mmcm | 4,844 | 5,340 | |||||
| 15,418 | 15,986 | Total natural gas production by subsidiaries and purchases, mmcm | 46,540 | 47,699 | |||||
| 2,346 | 1,533 | Liquids production including proportionate share in the production of joint ventures, thousand tons (mt) | 6,535 | 4,275 | |||||
| 969 | 1,065 | including liquids production by subsidiaries, mt | 3,021 | 3,244 | |||||
| 2,555 | 879 | Liquids purchases from joint ventures, mt | 6,442 | 1,939 | |||||
| 37 | 33 | Other purchases of liquids, mt | 58 | 46 | |||||
| 3,561 | 1,977 | Total liquids production by subsidiaries and purchases, mt | 9,521 | 5,229 |
Hydrocarbon Sales Volumes
| 3Q 2015 | 3Q 2014 | 9M 2015 | 9M 2014 | ||||||
| 14,272 | 14,944 | Natural gas, mmcm | 44,747 | 48,244 | |||||
| 13,435 | 14,107 | including sales to end-customers | 42,014 | 45,388 | |||||
| 3,474 | 1,697 | Liquids, mt | 9,219 | 4,929 | |||||
| including: | |||||||||
| 1,613 | 1,025 | Stable gas condensate products | 5,038 | 3,077 | |||||
| 975 | 67 | Stable gas condensate | 1,796 | 142 | |||||
| 632 | 361 | Liquefied petroleum gas | 1,617 | 1,043 | |||||
| 251 | 241 | Crude oil | 760 | 659 | |||||
| 3 | 3 | Other | 8 | 8 |
In the first nine months 2015, our natural gas sales volumes totaled 44.7 billion cubic meters (“bcm”) (including 14.3 bcm in the third quarter 2015), which is 7.2% lower as compared to the same period of 2014 mainly due to warmer weather during the winter peak season. As at 30 September 2015, the total amount of natural gas recorded as inventory was 2.7 bcm.
In the nine months 2015, liquid hydrocarbon sales volumes totaled 9.22 million tons (including 3.47 million tons sold in the third quarter 2015), representing an 87.0% increase as compared to the corresponding period of 2014. Higher volumes of gas condensate purchased from our joint ventures due to production growth at the SeverEnergia joint venture fields and the successful launch of the Termokarstovoye field at the Terneftegas joint venture as well as the increase of crude oil production by subsidiaries positively impacted our liquids sales during the period. As at 30 September 2015, 0.83 million tons of liquid hydrocarbons were in transit or storage and recognized as inventory.
Selected Balance Sheet Items
(in millions of Russian roubles)
| 30 September 2015 | 31 December 2014 | ||||
| ASSETS | |||||
| Non-current assets | 665,729 | 572,548 | |||
| Property, plant and equipment | 322,064 | 291,726 | |||
| Investments in joint ventures | 163,549 | 166,231 | |||
| Long-term loans and receivables | 150,824 | 94,142 | |||
| Total current assets | 136,720 | 126,591 | |||
| Total assets | 802,449 | 699,139 | |||
| LIABILITIES AND EQUITY | |||||
| Non-current liabilities | 223,367 | 230,807 | |||
| Long-term debt | 194,726 | 204,699 | |||
| Current liabilities | 166,366 | 81,208 | |||
| Total liabilities | 389,733 | 312,015 | |||
| Equity attributable to OAO NOVATEK shareholders | 411,323 | 384,755 | |||
| Non-controlling interest | 1,393 | 2,369 | |||
| Total equity | 412,716 | 387,124 | |||
| Total liabilities and equity | 802,449 | 699,139 |
The full set of non-audited consolidated interim condensed IFRS financial statements, 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).
***
For further information, please visit www.novatek.ru or contact:
| Press Service+7 (495) 721 2207 | Investor Relations+7 (495) 730 6013[email protected] |
***
OAO NOVATEK is Russia’s largest independent gas producer and the second-largest natural gas producer in Russia. 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 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 16% of the world’s gas production. NOVATEK is an open 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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