NOVATEK Announces Consolidated IFRS Results for the Year Ended 31 December 2019
PAO NOVATEK today released its audited consolidated financial statements for the year ended 31 December 2019 prepared in accordance with International Financial Reporting Standards (“IFRS”).
(in millions of Russian roubles except as stated)
|
|
FY 2019
|
FY 2018
|
|
Oil and gas sales
|
852,232
|
825,761
|
|
Other revenues
|
10,571
|
5,997
|
|
Total revenues
|
862,803
|
831,758
|
|
Operating expenses
|
(640,463)
|
(603,912)
|
|
Net gain on disposal of interests in subsidiaries and joint ventures
|
682,733
|
1,645
|
|
Other operating income (loss)
|
(35,484)
|
(2,307)
|
|
Normalized profit from operations*
|
221,398
|
225,539
|
|
Normalized EBITDA of subsidiaries*
|
253,552
|
259,370
|
|
Normalized EBITDA including share in
EBITDA of joint ventures*
|
461,157
|
415,296
|
|
Finance income (expense)
|
(15,712)
|
38,608
|
|
Share of profit (loss) of joint ventures, net of income tax
|
149,238
|
(37,258)
|
|
Profit before income tax
|
1,003,115
|
228,534
|
|
Profit attributable to
shareholders of PAO NOVATEK
|
865,477
|
163,742
|
|
Normalized profit attributable to
shareholders of PAO NOVATEK*, excluding the effect of foreign exchange gains (losses) |
245,002
|
232,930
|
|
Normalized basic and diluted earnings per share*,
excluding the effect of foreign exchange gains (losses) (in Russian roubles) |
81.35
|
77.29
|
|
Cash used for capital expenditures
|
162,502
|
94,038
|
Revenues and EBITDA
In 2019, our total revenues and Normalized EBITDA, including our share in EBITDA of joint ventures, increased to RR 862.8 billion and RR 461.2 billion, or by 3.7% and 11.0%, respectively, as compared to 2018.
The increases in total revenues and Normalized EBITDA were largely due to an increase in our natural gas sales volumes primarily resulted from the production launch at the second and third LNG trains at Yamal LNG in July and November 2018, respectively, and an increase in our domestic average natural gas sales price. The impact of these factors was offset by a decrease in hydrocarbons sales prices on international markets in 2019.
Profit attributable to shareholders of PAO NOVATEK
Profit attributable to shareholders of PAO NOVATEK increased to RR 865.5 billion (RR 287.39 per share), or 5.3 times, as compared to 2018. The Group’s profit in 2019 was significantly affected by the sale of a 40% participation interest in Arctic LNG 2 project and the reorganization of our joint venture Arcticgas. In addition, in both reporting periods, the Group’s subsidiaries and joint ventures recognised substantial non-cash foreign exchange effects on foreign currency denominated loans and cash balances.
Excluding the effects from the disposal of interests in subsidiaries and joint ventures, as well as foreign exchange differences, Normalized profit attributable to shareholders of PAO NOVATEK increased to RR 245.0 billion (RR 81.35 per share), or by 5.2%, as compared to 2018.
Cash used for capital expenditures
Our cash used for capital expenditures increased by RR 68.5 billion, or 72.8%, to RR 162.5 billion in 2019 as compared to RR 94.0 billion in 2018. A significant portion of our capital expenditures related to the development of our LNG projects (Arctic LNG 2 prior to March 2019, the LNG construction center located in the Murmansk region and the Obskiy LNG project), the North-Russkoye field, the Beregovoye field, crude oil deposits of the East-Tarkosalinskoye and the Yarudeyskoye fields, and exploratory drilling.
|
|
FY 2019
|
FY 2018
|
|
Total hydrocarbon production,
million barrels of oil equivalent (million boe)
|
589.9
|
549.1
|
|
Total production (million boe per day)
|
1.62
|
1.50
|
|
Natural gas production including proportionate share in
the production of joint ventures, million cubic meters (mmcm)
|
74,700
|
68,806
|
|
Natural gas production by subsidiaries
|
39,389
|
41,860
|
|
Natural gas purchases from joint ventures
|
31,296
|
24,892
|
|
Other purchases of natural gas
|
8,544
|
8,119
|
|
Total natural gas production by subsidiaries
and purchases (mmcm)
|
79,229
|
74,871
|
|
Liquids production including proportionate share in
the production of joint ventures, thousand tons (mt)
|
12,148
|
11,800
|
|
Liquids production by subsidiaries
|
6,480
|
6,546
|
|
Liquids purchases from joint ventures
|
9,566
|
9,368
|
|
Other purchases of liquids
|
242
|
226
|
|
Total liquids production by subsidiaries and purchases (mt)
|
16,288
|
16,140
|
In 2019, our total natural gas and liquids production including our proportionate share in the production of joint ventures increased by 8.6% and 2.9%, respectively, as compared to 2018. The main factors positively affecting the production increase were the launch of LNG production at the second and third LNG trains at Yamal LNG in July and November 2018, respectively, and the commencement of crude oil commercial production at the Yaro-Yakhinskoye field of our joint venture Arcticgas in December 2018.
|
|
FY 2019
|
FY 2018
|
|
Natural gas (mmcm)
|
78,452
|
72,134
|
|
including:
|
|
|
|
Sales in the Russian Federation
|
65,653
|
66,073
|
|
Sales on international markets
|
12,799
|
6,061
|
|
Liquids (mt)
|
16,355
|
15,822
|
|
including:
|
|
|
|
Stable gas condensate refined products
|
6,981
|
6,683
|
|
Crude oil
|
4,834
|
4,542
|
|
Liquefied petroleum gas
|
2,777
|
2,676
|
|
Stable gas condensate
|
1,739
|
1,908
|
|
Other oil products
|
24
|
13
|
In 2019, our natural gas sales volumes totaled 78.5 billion cubic meters (bcm), representing an increase of 8.8% as compared to 2018, due to an increase in LNG sales volumes purchased mainly from our joint ventures OAO Yamal LNG and OOO Cryogas-Vysotsk. As at 31 December 2019, we recorded 1.2 bcm of natural gas in inventory balances compared to 2.2 bcm at 31 December 2018 relating mainly to natural gas in the Underground Gas Storage Facilities. Natural gas inventory balances depend on the Group’s demand for natural gas withdrawals for the sale in the subsequent periods.
In 2019, our liquid hydrocarbons sales volumes totaled 16.4 million tons, representing an increase of 3.4%, as compared to 2018. The increase was mainly due to crude oil purchases from our joint venture Arcticgas resulting from the commencement of crude oil production at the Yaro-Yakhinskoye field in December 2018. As at 31 December 2019, we recorded 801 mt of liquid hydrocarbons in transit or storage and recognized as inventory as compared to 1,069 mt at 31 December 2018. Our liquid hydrocarbon inventory balances tend to fluctuate period on period and are usually realized in the following reporting period.
| 31 December 2019 | 31 December 2018 | |
| ASSETS | ||
| Non-current assets | 1,516,371 | 923,050 |
| Property, plant and equipment | 556,798 | 408,201 |
| Investments in joint ventures | 585,340 | 244,500 |
| Long-term loans and receivables | 231,898 | 232,922 |
| Current assets | 496,496 | 293,320 |
| Total assets | 2,012,867 | 1,216,370 |
| LIABILITIES AND EQUITY | ||
| Non-current liabilities | 228,678 | 222,752 |
| Long-term debt | 139,852 | 170,043 |
| Current liabilities | 117,113 | 107,023 |
| Total liabilities | 345,791 | 329,775 |
| Equity attributable to PAO NOVATEK shareholders
|
1,647,509 | 868,254 |
| Non-controlling interest | 19,567 | 18,341 |
| Total equity | 1,667,076 | 886,595 |
| Total liabilities and equity | 2,012,867 | 1,216,370 |
The full set of audited consolidated IFRS financial statements for the year ended 31 December 2019, 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).
