NOVATEK Announces Consolidated IFRS Results For Second Quarter and First Half 2017
PAO NOVATEK today released its consolidated interim condensed financial statements as of and for the three and six months ended 30 June 2017 prepared in accordance with International Financial Reporting Standards (“IFRS”).
(in millions of Russian roubles)
2Q 2017 | 2Q2016 | 1H 2017 | 1H 2016 | |
128,030 | 126,463 | Oil and gas sales | 282,031 | 264,674 |
800 | 925 | Other revenues | 1,427 | 2,065 |
128,830 | 127,388 | Total revenues | 283,458 | 266,739 |
(94,033) | (90,019) | Operating expenses | (203,397) | (187,178) |
– | – | Net gain on disposal of interests in joint ventures | – | 73,072 |
351 | (1,731) | Other operating income (loss) | 625 | (760) |
35,148 | 35,638 | Profit from operations | 80,686 | 151,873 |
43,798 | 46,276 | Normalized EBITDA of subsidiaries* | 97,613 | 97,099 |
56,072 | 59,507 | Normalized EBITDA including share in EBITDA of joint ventures* | 124,252 | 121,643 |
13,414 | 74 | Finance income (expense) | 4,812 | 990 |
(33,768) | 19,623 | Share of profit (loss) of joint ventures, net of income tax | 9,858 | 43,004 |
14,794 | 55,335 | Profit before income tax | 95,356 | 195,867 |
3,243 | 45,934 | Profit attributable to PAO NOVATEK shareholders | 74,261 | 161,851 |
33,772 | 29,610 | Normalized profit attributable to PAO NOVATEK shareholders** | 78,117 | 66,509 |
11.20 | 9.81 | Normalized basic and diluted earnings per share** (in Russian roubles) | 25.89 | 22.03 |
In the second quarter and first half 2017, our total revenues increased by 1.1% and 6.3%, respectively, compared to the corresponding periods of 2016. Our Normalized EBITDA, inclusive of joint ventures, amounted to RR 56.1 billion in the second quarter 2017 and RR 124.3 billion in the first half 2017, representing a decrease of 5.8% and an increase of 2.1%, respectively, as compared to the corresponding periods of 2016. The growth in our revenues and EBITDA in the first half 2017 was largely driven by the increase in natural gas sales volumes and higher liquids sales prices. Our EBITDA in the second quarter 2017 was significantly affected by lower average realized prices in Russian rouble terms for most of our liquid hydrocarbon products as well as the decrease in liquid hydrocarbons sales volumes.
In the second quarter and first half 2017, profit attributable to NOVATEK shareholders decreased to RR 3.2 billion (RR 1.08 per share), or by 92.9%, and to RR 74.3 billion (RR 24.62 per share) or by 54.1%, as compared to the corresponding periods of 2016. Profit dynamics was mainly impacted by the closing in the first quarter 2016 of a transaction for the sale of a 9.9% equity stake in Yamal LNG and by the foreign exchange effect (including at the joint ventures level). Excluding these effects, normalized profit attributable to NOVATEK shareholders totalled RR 33.8 billion (RR 11.20 per share) in the second quarter 2017 and RR 78.1 billion (RR 25.89 per share) in the first half 2017, representing an increase by 14.1% and 17.5%, respectively, as compared to the corresponding periods of 2016.
2Q2017 | 2Q 2016 | 1H2017 | 1H 2016 | |
124.6 | 134.1 | Total hydrocarbon production, million barrels of oil equivalent (boe) | 252.3 | 273.6 |
1.37 | 1.47 | Total production, million boe per day | 1.39 | 1.50 |
15,323 | 16,521 | Natural gas production including proportionate share in the production of joint ventures, million cubic meters (mmcm) | 31,044 | 33,757 |
10,600 | 11,602 | including production by subsidiaries, mmcm | 21,521 | 23,778 |
2,356 | 1,840 | Natural gas purchases from joint ventures, mmcm | 7,657 | 4,589 |
1,936 | 1,939 | Other purchases of natural gas, mmcm | 3,796 | 3,950 |
14,892 | 15,381 | Total natural gas production by subsidiaries and purchases, mmcm | 32,974 | 32,317 |
2,918 | 3,119 | Liquids production including proportionate share in the production of joint ventures, thousand tons (mt) | 5,885 | 6,327 |
1,687 | 1,809 | including production by subsidiaries, mt | 3,400 | 3,664 |
2,296 | 2,450 | Liquids purchases from joint ventures, mt | 4,639 | 4,981 |
41 | 13 | Other purchases of liquids, mt | 78 | 44 |
4,024 | 4,272 | Total liquids production by subsidiaries and purchases, mt | 8,117 | 8,689 |
2Q2017 | 2Q 2016 | 1H2017 | 1H 2016 | |
14,380 | 14,062 | Natural gas, mmcm | 33,132 | 31,837 |
13,780 | 13,045 | including sales to end-users | 31,109 | 29,139 |
4,072 | 4,139 | Liquids, mt | 8,185 | 8,781 |
including: | ||||
1,763 | 1,684 | Stable gas condensate products | 3,600 | 3,565 |
1,211 | 1,157 | Crude oil | 2,283 | 2,345 |
645 | 656 | Liquefied petroleum gas | 1,322 | 1,359 |
450 | 639 | Stable gas condensate | 974 | 1,507 |
3 | 3 | Other petroleum products | 6 | 5 |
Our natural gas sales volumes totalled 14.4 billion cubic meters (bcm) in the second quarter 2017 and 33.1 bcm in the first half 2017. Compared to the second quarter and first half 2016 the sales volumes increased by 2.3% and 4.1%, respectively, due to the increased demand for natural gas from end-customers resulted, among other factors, from weather conditions. As at the end of the first half 2017, the total amount of natural gas recorded as inventory totalled 0.6 bcm compared to 1.7 bcm as at the end of the first half 2016.
In the second quarter 2017, liquid hydrocarbon sales volumes amounted to 4.1 million tons, representing a 1.6% decrease in volumes sold as compared to the second quarter 2016. In the first half 2017, liquid hydrocarbon sales volumes totaled 8,2 million tons, representing a 6.8% decrease as compared to the first half 2016. The decrease was due to a natural decline in gas condensate production volumes at mature fields of our subsidiaries and joint ventures. As at 30 June 2017, 699 mt of liquid hydrocarbons were in transit or storage and recognized as inventory.
30 June 2017 | 31 December 2016 | |
ASSETS | ||
Non-current assets | 840,385 | 831,074 |
Property, plant and equipment | 334,318 | 331,795 |
Investments in joint ventures | 269,220 | 259,650 |
Long-term loans and receivables | 206,298 | 209,145 |
Total current assets | 134,117 | 132,760 |
Total assets | 974,502 | 963,834 |
LIABILITIES AND EQUITY | ||
Non-current liabilities | 184,162 | 197,323 |
Long-term debt | 144,404 | 161,296 |
Current liabilities | 77,962 | 108,791 |
Total liabilities | 262,124 | 306,114 |
Equity attributable to PAO NOVATEK shareholders | 698,819 | 648,350 |
Non-controlling interest | 13,559 | 9,370 |
Total equity | 712,378 | 657,720 |
Total liabilities and equity | 974,502 | 963,834 |
PAO NOVATEK is one of the largest independent natural gas producers 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 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».
