OGZD.L Regulatory News (OGZD)

13 Feb 2007 16:02

Oao Gazprom13 February 2007 PRESS - RELEASE 13.02.2007Moscow GAZPROM REPORTS ITS CONSOLIDATED INTERIM CONDENSED FINANCIAL RESULTS UNDERINTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS) FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2006 On 13 February 2007 OAO Gazprom issued its unaudited consolidated interimcondensed financial information prepared in accordance with InternationalAccounting Standard 34 "Interim Financial Reporting" (IAS 34) for the ninemonths ended 30 September 2006. A significant factor impacting the comparability of the consolidated financialinformation of Gazprom Group for the nine months ended 30 September 2006 withthe same period of 2005 was the acquisition in October 2005 of OAO Sibneft (fromJune 2006 - OAO Gazprom Neft (Gazprom neft)). Higher oil and gas market pricesalso significantly impacted results. The table below presents the unaudited consolidated interim condensed statementof income for the nine months ended 30 September 2006 and 2005. All amounts arepresented in millions of Russian Roubles, unless otherwise stated. Nine months ended 30 September 2006 2005 Sales (net of excise tax, VAT and customs duties) 1,581,328 902,235Operating expenses (1,012,913) (587,338)Operating profit 568,415 314,897 Finance income 82,320 37,204Finance expenses (51,576) (40,244)Share of net income of associated undertakings andjointly controlled entities 19,869 10,935Gain on disposal of available-for-sale financialassets 3,531 1,843Profit before profit tax 622,559 324,635 Current profit tax expense (156,684) (78,183)Deferred profit tax expense (5,610) (12,491)Profit tax expense (162,294) (90,674)Profit for the period 460,265 233,961 Profit for the period attributable to:Equity holders of OAO Gazprom 442,296 232,130Minority interest 17,969 1,831 460,265 233,961 Sales (net of excise, VAT and customs duties) increased by RR679,093 million, or75%, to RR1,581,328 million in the nine months ended 30 September 2006 comparedto the nine months ended 30 September 2005. More detailed information on oursales for the nine months ended 30 September 2006 and 2005 is presented in thetable below. in million RR (unless otherwise stated) Nine months ended 30 SeptemberSale of gas 2006 2005 Europe Net sales (net of excise tax and customs duties) 604,231 426,509 Volumes in bcm 118.8 115.7 Gross average price, RR/mcm (including excise tax and customs duties) 6,995.4 5,087.4 FSU Net sales (net of excise tax, VAT and customs duties) 157,283 84,027 Volumes in bcm 75.5 59.0 Gross average price, RR/mcm (including excise tax, customs duties and net of VAT) 2,441.7 1,760.1 Russia Net sales (net of excise tax and VAT) 246,822 212,774 Volumes in bcm 219.6 210.7 Gross average price, RR/mcm (including excise tax and net of VAT) 1,128.0 1,015.4 Total sales of gas Net sales (net of excise tax, VAT and customs duties) 1,008,336 723,310 Volumes in bcm 413.9 385.4 Net sales of refined products (net of excise tax, VAT and customs duties) 333,216 104,900Net sales of crude oil and gas condensate (net of excise tax, VAT and customs duties) 141,049 10,368Gas transportation sales (net of VAT) 25,141 18,032Other revenues (net of VAT) 73,586 45,625 Total sales (net of excise tax, VAT and customs duties) 1,581,328 902,235 Net sales of natural gas increased by RR285,026 million, or 39%, to RR1,008,336million in the nine months ended 30 September 2006 compared to the nine monthsended 30 September 2005. This increase was primarily due to higher European andFSU prices for gas as well as higher volumes of gas sold. Net sales of natural gas to Europe increased by RR177,722 million, or 42%, toRR604,231 million in the nine months ended 30 September 2006 compared to thenine months ended 30 September 2005. This was primarily due to higher averageprices for gas to European customers and the 3% increase in the volume of gassold. Net sales of natural gas to FSU countries increased by RR73,256 million, or 87%,to RR157,283 million in the nine months ended 30 September 2006 compared to thenine months ended 30 September 2005. The increase of sales in this segment isexplained by higher prices and higher sales volumes. Net sales of natural gas in the domestic market increased by RR34,048 million,or 16%, to RR246,822 million in the nine months ended 30 September 2006 comparedto the nine months ended 30 September 2005. This is explained primarily byincreased average domestic price for gas established by the Federal TariffService, and increased volumes. In the nine months ended 30 September 2006 sales of refined products increasedby RR228,316 million primarily due to the consolidation of Gazprom Neft as wellas increased market prices for refined products in the nine months ended 30September 2006 compared to the nine months ended 30 September 2005. In the nine months ended 30 September 2006 net sales of crude oil and gascondensate increased by RR130,681 million. The increase of sales in this segmentis explained by the consolidation of Gazprom Neft's results starting fromOctober 2005. Operating expenses increased by RR425,575 million, or 72%, to RR1,012,913million in the nine months ended 30 September 2006 compared to the nine monthsended 30 September 2005 primarily due to the consolidation of Gazprom Neft'sresults since October 2005, when control was established. The increase in operating expenses included higher expenses on purchased oil andgas (RR139,659 million, including Gazprom Neft - RR59,084 million), higher taxesother than on income (RR74,414 million, including Gazprom Neft - RR64,739million), higher expenses on transit of gas, oil and refined products (RR48,497million, including Gazprom Neft - RR42,254 million.), higher depreciation(RR33,589 million, including Gazprom Neft - RR28,647 million), higher expenseson goods for resale, including refinery products (RR31,502 million, includingGazprom Neft - RR27,241 million), higher staff costs (RR27,762 million). Theincrease in purchased oil and gas was caused by the appearance of a new type ofexpenses - "purchased oil" - due to consolidation of Gazprom Neft, and increasein cost of purchased oil and gas in Central Asia. The increase in taxes otherthan on income was primarily due to consolidation of Gazprom Neft and changes intax legislation related to natural resources production tax effective from 1January 2006. The increase in expenses on transit of gas, oil and refinedproducts was primarily due to consolidation of Gazprom Neft as well as a generalincrease in gas volumes sold to Europe and FSU customers and the growth oftransit tariffs. The increase in the staff costs resulted from the increase inaverage base salaries and other payments and the increase in average number ofemployees. The profit tax increased by RR71,620 million, or 79%, to RR162,294 million inthe nine months ended 30 September 2006 compared to RR90,674 million for thenine months ended 30 September 2005. Our effective current profit tax rate forthe nine months ended 30 September 2006 was 26.0% compared to 27.9% for the ninemonths ended 30 September 2005. In the nine months ended 30 September 2006 our profit for the periodattributable to equity holders of OAO Gazprom totaled RR442,296 million which isRR210,166 million, or 91%, higher compared to the nine months ended 30 September2005. 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 RR30,244 million, or 4%, from RR797,465million as of 31 December 2005 to RR767,221 million as of 30 September 2006.This decrease can be explained primarily by cash repayments of long-termborrowings. More detailed information on the IFRS consolidated interim condensed financialinformation for the nine months ended 30 Setember 2006 can be found on OAOGazprom web site. OAO GAZPROM INFORMATION DIVISION contact phone numbers: (495) 719-10-77, 719-49-37, 719-47-36, 719-28-01fax: (495) 719-90-08e-mail: pr@gazprom.ruhttp:// www.gazprom.ru This information is provided by RNS The company news service from the London Stock Exchange