OGZD.L Regulatory News (OGZD)

8 Oct 2007 07:31

Oao Gazprom08 October 2007 RELEASE 08.10.2007 Moscow GAZPROM REPORTS ITS CONSOLIDATED INTERIM CONDENSED FINANCIAL RESULTS UNDERINTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS) FOR THE THREE MONTHS ENDED 31 MARCH 2007 On 08 October 2007 OAO Gazprom issued its unaudited consolidated interimcondensed financial information prepared in accordance with InternationalAccounting Standard 34 "Interim Financial Reporting" ("IAS 34") for the threemonths ended 31 March 2007. The revised accounting treatment of the non governmental pension fund, NPFGazfund, has a significant impact on the Group's financial information for thethree months ended 31 March 2007. In connection with the latest developments inthe legislation regulating pension funds activity, NPF Gazfund wasdeconsolidated from the consolidated financial information of OAO Gazprom in thefirst quarter 2007. As a result of this deconsolidation, the Gazfund investmentassets are now accounted for as plan assets on the OAO Gazprom consolidatedinterim condensed balance sheet under IAS 19 "Employee Benefits". The principalbalance sheet line items affected are short term financial assets, othernon-current assets, provisions for liabilities and charges, minority interestand equity including treasury shares. In addition, where NPF Gazfund continuesto hold ownership interests in OAO Gazprom subsidiaries (for example, ABGazprombank (ZAO), OAO Sibur-Holding), those interests are reflected as minorityinterest in the accompanying financial information. The aggregate effect of NPF Gazfund deconsolidation results in recognition ofincome of RR 44,692 million in the line "Deconsolidation of NPF Gazfund" in theConsolidated interim condensed statement of income and the increase in equity ofRR 111,015 million in the line "Deconsolidation of NPF Gazfund". The table below presents the unaudited consolidated interim condensed statementof income for the three months ended 31 March 2007 and 2006. All amounts arepresented in million Russian Roubles, unless otherwise stated. Three months ended 31 March 2007 2006Sales (net of excise tax, VAT and customs duties) 611,528 585,777Operating expenses (401,733) (355,267)Operating profit 209,795 230,510 Deconsolidation of NPF Gazfund 44,692 -Finance income 25,415 36,569Finance expenses (20,036) (18,552)Share of net income of associated undertakings and jointly controlled entities 11,046 5,988Gain on disposal of available-for-sale financial assets 8,593 1,215Profit before profit tax 279,505 255,730 Current profit tax expense (56,334) (62,788)Deferred profit tax expense (6,034) (2,043)Profit tax expense (62,368) (64,831) Profit for the period 217,137 190,899Attributable to:Equity holders of OAO Gazprom 210,312 185,157Minority interest 6,825 5,742 217,137 190,899 Sales (net of excise tax, VAT and customs duties) increased by RR 25,751million, or 4%, to RR 611,528 million in the three months ended 31 March 2007compared to the three months ended 31 March 2006. More detailed information onour sales for the three months ended 31 March 2007 and 2006 is presented in thetable below.in million RR (unless otherwise stated) Three months ended 31 March 2007 2006Sales of gas Far Abroad Net sales (net of excise tax and customs duties) 218,440 228,340Volumes in bcm 39.9 45.6Average price, RR/mcm (including excise tax and customs duties) 7,091.4 6,906.8FSU Net sales (net of excise tax, VAT and customs duties) 74,078 61,236Volumes in bcm 28.1 28.8Average price, RR/mcm (including excise tax, customs duties and net of VAT) 2,942.1 2,528.1Russia Net sales (net of excise tax and VAT) 135,915 124,064Volumes in bcm 105.6 111.5Average price, RR/mcm (including excise tax and net of VAT) 1,286.9 1,120.7Total sales of gas Net sales (net of excise tax, VAT and customs duties) 428,433 413,640Volumes in bcm 173.6 185.9 Net sales of refined products (net of excise tax, VAT and customs duties) 105,767 98,623Net sales of crude oil and gas condensate (net of excise tax, VAT and customs 32,348 45,121duties)Gas transportation sales (net of VAT) 10,799 8,905Other revenues (net of VAT) 34,181 19,488Total sales (net of excise tax, VAT and customs duties) 611,528 585,777 Net sales of natural gas increased by RR 14,793 million, or 4%, to RR 428,433million in the three months ended 31 March 2007 compared to the three monthsended 31 March 2006. This increase was primarily due to higher FSU and domesticprices for gas. Net sales of natural gas to the Far Abroad decreased by RR 9,900 million, or 4%,to RR 218,440 million in the three months ended 31 March 2007 compared to thethree months ended 31 March 2006. This is explained primarily by the fact thatthe volume of sold gas decreased by 13% or 5.7 bcm which was partially offset byincreased average prices. Net sales of natural gas to FSU countries increased by RR 12,842 million, or21%, to RR 74,078 million in the three months ended 31 March 2007 compared tothe three months ended 31 March 2006. The increase of sales in this segment isexplained by higher average prices. Net sales of natural gas in the domestic market increased by RR 11,851 million,or 10%, to RR 135,915 million in the three months ended 31 March 2007 comparedto the three months ended 31 March 2006. This is explained primarily by theincreased average domestic price for gas established by the Federal TariffService, which was partially offset by a 5% reduction in the volume of sold gas. In the three months ended 31 March 2007 net sales of crude oil and gascondensate decreased by RR 12,773 million, or 28%, compared to the three monthsended 31 March 2006. This decrease in the sales of crude oil and gas condensateis due to Gazprom Neft's activities: in the three months ended 31 March 2007 netsales of crude oil decreased by RR 12,046 million, or 30%, to RR 28,558 millioncompared to the three months ended 31 March 2006. Operating expenses increased by RR 46,466 million, or 13%, to RR 401,733 millionin the three months ended 31 March 2007 compared to the three months ended 31March 2006. The component which accounted for the major part (or 96%) of the increase inoperating expenses was higher expenses for purchased oil and gas. Expenses onpurchased oil and gas increased by RR 44,377 million, or 74%. Expenses onpurchased natural gas increased by RR 43,423 million and on purchased oil - byRR 954 million. In the three months ended 31 March 2007 the profit for the period attributableto equity holders of OAO Gazprom totaled RR 210,312 million which is RR 25,155million, or 14%, higher compared to the three months ended 31 March 2006. Our net debt balance (defined as the sum of short-term borrowings, currentportion of long-term borrowings, short-term promissory notes payable, long-termborrowings, long-term promissory notes payable and restructured tax liabilities,net of cash and cash equivalents and balances of cash and cash equivalentsrestricted as to withdrawal under the terms of certain borrowings and othercontractual obligations) decreased by RR 340,009 million, or 42%, from RR807,814 million as of 31 December 2006 to RR 467,805 million as of 31 March2007. This decrease can be explained by a significant increase of cash and cashequivalent balances in bank accounts of the Group primarily due to temporaryplacement of funds in AB Gazprombank (ZAO) from third parties. More detailed information on the IFRS consolidated interim condensed financialinformation for the three months ended 31 March 2007 can be found on OAO Gazpromweb site (www.gazprom.com). INFORMATION DIVISION www.gazprom.com _____________________________________________________________________________________________ Contacts for Press Investor Relations +7 (495) 719-10-77 +7 (495) 719-10-97 +7 (495) 719-49-37 +7 (495) 719-10-36 +7 (495) 719-47-36 +7 (495) 719-10-27 +7 (495) 719-28-01 pr@gazprom.ru ir@gazprom.ru This information is provided by RNS The company news service from the London Stock Exchange