30 Dec 2008 07:00
PRESS-RELEASE
30.12.2008
Moscow
GAZPROM REPORTS ITS CONSOLIDATED INTERIM CONDENSED FINANCIAL RESULTS UNDER INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS) FOR THE SIX MONTHS ENDED 30 JUNE 2008
On 30 December 2008 OAO Gazprom issued its unaudited consolidated interim condensed financial information prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" (IAS 34) for the six months ended 30 June 2008.
The deconsolidation of the Gazprombank Group as of 30 June 2008 had the most significant impact on this financial information. OAO Gazprombank's general meeting of shareholders on 24 June 2008 elected a new Board of Directors. The new Board of Directors has 5 representatives of the Group out of its 12 members. As a result, the Group lost its ability to control the financial and operational policies of OAO Gazprombank and its subsidiaries, including OAO Sibur Holding and its subsidiaries as well as entities of Gazprom-Media Group, and terminated consolidation of Gazprombank Group entities as subsidiaries. Given the fact that the Group continues to significantly influence Gazprombank Group, it is included in the financial information as an associated company. This change impacted the consolidated interim condensed balance sheet as of the reporting date but did not have a significant impact on the consolidated interim condensed statement of income.
The table below presents the unaudited consolidated interim condensed statement of income for the six months ended 30 June 2008 and 2007. All amounts are presented in millions of Russian Roubles, unless otherwise stated.
| Six months ended | |||||
| 30 June | |||||
| 2008 | 2007 | ||||
| Sales (net of excise tax, VAT and customs duties) | 1,743,196 | 1,143,894 | |||
| Operating expenses | (1,026,576) | (792,215) | |||
| Operating profit | 716,620 | 351,679 | |||
| Gain from change in fair value of call option | 28,375 | - | |||
| Deconsolidation of NPF Gazfund | - | 44,692 | |||
| Finance income | 85,605 | 63,229 | |||
| Finance expenses | (71,925) | (51,128) | |||
| Share of net income of associated undertakings and jointly controlled entities | 25,392 | 15,194 | |||
| Gains on disposal of available-for-sale financial assets | 11,476 | 18,447 | |||
| Profit before profit tax | 795,543 | 442,113 | |||
| Current profit tax expense | (180,530) | (105,834) | |||
| Deferred profit tax expense | (5,660) | (6,229) | |||
| Profit tax expense | (186,190) | (112,063) | |||
| Profit for the period | 609,353 | 330,050 | |||
| Profit for the period attributable to: | |||||
| Equity holders of OAO Gazprom | 573,757 | 313,180 | |||
| Minority interest | 35,596 609,353 | 16,870 330,050 | |||
Sales (net of excise tax, VAT and customs duties) increased by RR 599,302 million, or 52%, to RR 1,743,196 million in the six months ended 30 June 2008 compared to the six months ended 30 June 2007. More detailed information on our sales for the six months ended 30 June 2008 and 2007 is presented in the table below.
| in millions of RR (unless otherwise stated) | Six months ended 30 June | ||
| Sales of gas | 2008 | 2007 | |
| Far Abroad | |||
| Net sales (net of excise tax and customs duties) | 661,554 | 410,206 | |
| Volumes in bcm | 99.7 | 79.4 | |
| Average price, RR/mcm (including excise tax and customs duties) | 8,762.4 | 6,721.7 | |
| FSU | |||
| Net sales (net of excise tax, VAT and customs duties) | 163,637 | 133,787 | |
| Volumes in bcm | 49.5 | 50.4 | |
| Average price, RR/mcm (including excise tax, customs duties and net of VAT) | 3,578.2 | 2,884.6 | |
| Russia | |||
| Net sales (net of excise tax and VAT) | 264,273 | 214,300 | |
| Volumes in bcm | 159.9 | 165.1 | |
| Average price, RR/mcm (including excise tax and net of VAT) | 1,652.7 | 1,298.1 | |
| Total sales of gas | |||
| Net sales (net of excise tax, VAT and customs duties) | 1,089,464 | 758,293 | |
| Volumes in bcm | 309.1 | 294.9 | |
| Net sales of refined products (net of excise tax, VAT and customs duties) | 353,324 | 221,784 | |
| Net sales of crude oil and gas condensate (net of excise tax, VAT and customs duties) | 134,616 | 74,994 | |
| Gas transportation sales (net of VAT) | 31,048 | 21,059 | |
| Other revenues (net of VAT) | __134,744 | __ 67,764 | |
| Total sales (net of excise tax, VAT and customs duties) | 1,743,196 | 1,143,894 | |
Net sales of gas increased by RR 331,171 million, or 44%, to RR 1,089,464 million in the six months ended 30 June 2008 compared to the six months ended 30 June 2007. This increase was primarily due to the increase of the volume of gas sold to Far Abroad countries and higher prices of gas sold in each geographical segment.
For the six months ended 30 June 2008 net sales of gas to Far Abroad countries increased by RR 251,348 million, or 61%, to RR 661,554 million compared to the six months ended 30 June 2007. This mainly results from the increase of the volume of sold gas by 26%, or 20.3 bcm, and the growth of average prices.
Net sales of gas to FSU countries increased by RR 29,850 million, or 22%, to RR 163,637 million in the six months ended 30 June 2008 compared to the six months ended 30 June 2007. The increase of sales in this segment is explained by higher average realized prices, which was compensated by the decrease of the volume of sold gas by 2%, or 0.9 bcm.
Net sales of gas in the domestic market increased by RR 49,973 million, or 23%, to RR 264,273 million in the six months ended 30 June 2008 compared to the six months ended 30 June 2007. This is explained primarily by increased average domestic price for gas set up by the Federal Tariffs Service.
Net sales of refined products increased by RR 131,540, or 59%, in the six months ended 30 June 2008. The increase was mainly due to the increase of refined products prices.
Net sales of crude oil and gas condensate increased by RR 59,622 million, or 80%, in the six months ended 30 June 2008. The increase of net sales of crude oil and gas condensate primarily resulted from the Gazprom Neft activities: net sales of crude oil increased by RR 55,277 million, or 85%, to RR 120,081 million in the six months ended 30 June 2008 compared to the six months ended 30 June 2007.
Other revenues increased by RR 66,980 million, or 99%, to RR 134,744 million in the six months ended 30 June 2008 compared to the six months ended 30 June 2007. The increase of other revenues was primarily due to the consolidation of OAO Mosenergo as a subsidiary starting from June 2007. Net sales of OAO Mosenergo for the six months ended 30 June 2008, included in the Group's Other revenues category, amounted to RR 47,978 million. Operating expenses increased by RR 234,361 million, or 30%, to RR 1,026,576 million in the six months ended 30 June 2008 compared to the six months ended 30 June 2007.
Major items whose growth resulted in the increase of the total amount of operating expenses are: Purchased oil and gas (RR 95,612 million), Cost of goods for resale, including refined products (RR 37,894 million), Taxes other than on income (RR 26,315 million), Staff costs (RR 21,726 million), Transit of gas, oil and refined products (RR 16,094 million), Repairs and maintenance (RR 11,322 million), Depreciation (RR 6,723 million). The increase in Purchased oil and gas was mainly caused by the increase in the world oil prices and increase in gas trading on the European market and respective increase of gas purchases in Europe. This gas is purchased by the Group at market prices. The increase in Costs of goods for resale, including refined products was driven by general increase in prices for hydrocarbons and increase in volumes of purchases.
In the six months ended 30 June 2008 the profit attributable to equity holders of OAO Gazprom for the period totaled RR 573,757 million which is RR 260,577 million, or 83%, higher compared to the six months ended 30 June 2007.
Net debt balance (defined as the sum of short-term borrowings, current portion of long-term borrowings, short-term promissory notes payable, long-term borrowings, long-term promissory notes payable and restructured tax liabilities, net of cash and cash equivalents and balances of cash and cash equivalents restricted as to withdrawal under the terms of certain borrowings and other contractual obligations) decreased by RR 391,633 million, or 32%, from RR 1,228,583 million as of 31 December 2007 to RR 836,950 million as of 30 June 2008. This decrease can be primarily explained by the deconsolidation of Gazprombank Group starting from June 2008.
More detailed information on the IFRS consolidated interim condensed financial information for the six months ended 30 June 2008 can be found on OAO Gazprom web site (www.gazprom.ru).
OAO GAZPROM INFORMATION DIVISION
www.gazprom.ru
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