25 Apr 2018 12:00
FOR IMMEDIATE RELEASE
NOVATEK Announces Consolidated IFRS Resultsfor the First Quarter 2018
Moscow, 25 April 2018. PAO NOVATEK today released its consolidated interim condensed financial statements as of and for the three months ended 31 March 2018 prepared in accordance with International Financial Reporting Standards ("IFRS").
IFRS Financial Highlights(in millions of Russian roubles except as stated)
1Q 2018 | 1Q 2017 | |
Oil and gas sales | 178,485 | 154,001 |
Other revenues | 918 | 627 |
Total revenues | 179,403 | 154,628 |
Operating expenses | (131,037) | (109,364) |
Net gain on disposal of interests in joint ventures | 1,645 | - |
Other operating income (loss) | 102 | 274 |
Profit from operations* | 48,468 | 45,538 |
Normalized EBITDA of subsidiaries* | 56,421 | 53,815 |
Normalized EBITDA including share in EBITDA of joint ventures* | 76,306 | 68,180 |
Finance income (expense) | 5,402 | (8,602) |
Share of profit (loss) of joint ventures, net of income tax | 1,163 | 43,626 |
Profit before income tax | 56,678 | 80,562 |
Profit attributable to shareholders of PAO NOVATEK | 43,121 | 71,018 |
Normalized profit attributable toshareholders of PAO NOVATEK ** | 46,910 | 44,345 |
Normalized basic and diluted earnings per share** (in Russian roubles) | 15.56 | 14.70 |
* Excluding the effect from disposal of interests in joint ventures.
** Excluding the effects from the disposal of interests in joint ventures, as well as foreign exchange gains (losses).
In the first quarter of 2018, our total revenues amounted to RR 179.4 billion and Normalized EBITDA, including our share in EBITDA of joint ventures, totalled RR 76.3 billion, representing year-on-year increases of 16.0% and 11.9%, respectively. The increases in our total revenues and Normalized EBITDA were largely due to production launch at the first LNG train at Yamal LNG at the end of 2017 and an increase in average realized liquids and natural gas prices.
The Group's profits in both reporting periods were significantly impacted by the recognition of substantial non-cash foreign exchange effects on foreign currency denominated loans of the Group and its joint ventures. As a result, profit attributable to shareholders of PAO NOVATEK decreased to RR 43.1 billion (RR 14.30 per share), or by 39.3%, as compared to the corresponding period in 2017. Excluding the effect of foreign exchange differences, as well as the one-time effect from the disposal of interests in joint ventures, Normalized profit attributable to shareholders of PAO NOVATEK increased to RR 46.9 billion (RR 15.56 per share), or by 5.8%, as compared to the corresponding period in 2017.
Hydrocarbon Production and Purchased Volumes
1Q 2018 | 1Q 2017 | |
Total hydrocarbon production, million barrels of oil equivalent (million boe) | 132.5 | 130.5 |
Total production (million boe per day) | 1.47 | 1.45 |
Natural gas production including proportionate share in the production of joint ventures, million cubic meters (mmcm) | 16,508 | 16,150 |
Natural gas production by subsidiaries | 10,363 | 11,259 |
Natural gas purchases from joint ventures | 7,587 | 5,301 |
Other purchases of natural gas | 1,729 | 1,860 |
Total natural gas production by subsidiaries and purchases (mmcm) | 19,679 | 18,420 |
Liquids production including proportionate share in the production of joint ventures, thousand tons (mt) | 2,936 | 2,967 |
Liquids production by subsidiaries | 1,628 | 1,713 |
Liquids purchases from joint ventures | 2,300 | 2,343 |
Other purchases of liquids | 44 | 37 |
Total liquids production by subsidiaries and purchases (mt) | 3,972 | 4,093 |
Hydrocarbon Sales Volumes
1Q 2018 | 1Q 2017 | |
Natural gas (mmcm) | 20,263 | 18,752 |
including: |
|
|
Sales in the Russian Federation | 19,305 | 18,752 |
Sales on international markets | 958 | - |
Liquids (mt) | 3,777 | 4,113 |
including: | ||
Stable gas condensate refined products | 1,566 | 1,837 |
Crude oil | 1,123 | 1,072 |
Liquefied petroleum gas | 649 | 677 |
Stable gas condensate | 436 | 524 |
Other oil products | 3 | 3 |
Our operational results for the first quarter of 2018 were significantly impacted by the production launch of the first LNG train at Yamal LNG at the end of 2017, as well as the acquisitions of new producing fields at the end of 2017 and in the first quarter of 2018 (the Beregovoye, the West-Yaroyakhinskoye and the Syskonsyninskoye fields). As a result, our total natural gas production increased by 2.2%, and our total liquids production declined marginally by 1.0%.
Our natural gas sales volumes totaled 20.3 billion cubic meters (bcm), representing an 8.1% increase as compared to the corresponding period in 2017, due to the commencement of sales of LNG purchased from our joint venture Yamal LNG to international markets from December 2017 and an increase in volumes sold in the Russian Federation. As at the end of the first quarter of 2018, our cumulative natural gas inventory balances mainly in the Underground Gas Storage Facilities, the Gas Transmission System and own pipeline infrastructure totaled 79 mmcm and decreased by 954 mmcm during the quarter as compared to a decrease by 704 mmcm in the corresponding period in 2017.
Our liquid hydrocarbon sales volumes aggregated 3.8 million tons, representing an 8.2% decrease as compared to the corresponding period in 2017. The decrease in our liquids sales volumes was mainly impacted by an increase in liquids inventories by 140 mt in the first quarter of 2018 compared to a decrease by 90 mt in the first quarter of 2017. As at 31 March 2018, we recorded 1,102 mt of liquid hydrocarbons in transit or storage and recognized as inventory as compared to 813 mt at 31 March 2017. Our liquid hydrocarbon inventory balances tend to fluctuate period-on-period and are usually realized in the following reporting period.
Selected Items of Consolidated Statement of Financial Position
(in millions of Russian roubles)
31 March 2018 | 31 December 2017 | |
ASSETS | ||
Non-current assets | 944,456 | 890,726 |
Property, plant and equipment | 402,713 | 360,051 |
Investments in joint ventures | 289,494 | 285,326 |
Long-term loans and receivables | 217,179 | 211,901 |
Current assets | 143,552 | 153,436 |
Total assets | 1,088,008 | 1,044,162 |
LIABILITIES AND EQUITY | ||
Non-current liabilities | 193,657 | 184,545 |
Long-term debt | 142,018 | 141,448 |
Current liabilities | 76,704 | 83,958 |
Total liabilities | 270,361 | 268,503 |
Equity attributable toPAO NOVATEK shareholders
| 800,919 | 757,839 |
Non-controlling interest | 16,728 | 17,820 |
Total equity | 817,647 | 775,659 |
Total liabilities and equity | 1,088,008 | 1,044,162 |
The full set of 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 2207press@novatek.ru | Investor Relations+7 (495) 730 6013IR@novatek.ru |
***
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 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 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».