3 Mar 2009 07:00
PRESS RELEASE
03.03.2009
Moscow
GAZPROM REPORTS ITS CONSOLIDATED INTERIM CONDENSED FINANCIAL RESULTS UNDER INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS) FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2008
On 03 March 2009 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 nine months ended 30 September 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 statements 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 nine months ended 30 September 2008 and 2007. All amounts are presented in millions of Russian Roubles, unless otherwise stated.
| | Nine months ended | |||
| | 30 September | |||
| 2008 | | 2007 | ||
| | | | | |
| Sales (net of excise tax, VAT and customs duties) | 2,572,945 | | 1,660,069 | |
| Operating expenses | (1,550,246) | | (1,163,243) | |
| Operating profit | 1,022,699 | | 496,826 | |
| | | | | |
| Loss from change in fair value of call option | (41,973) | | - | |
| Deconsolidation of NPF Gazfund | - | | 44,692 | |
| Finance income | 114,692 | | 115,001 | |
| Finance expenses | (141,236) | | (87,021) | |
| Share of net income of associated undertakings and jointly controlled entities | 41,215 | | 22,489 | |
| Gains on disposal of available-for-sale financial assets | _20,889 | | _19,586 | |
| Profit before profit tax | 1,016,286 | | 611,573 | |
| | | | | |
| Current profit tax expense | (259,348) | | (150,366) | |
| Deferred profit tax expense | (5,262) | | (6,717) | |
| Profit tax expense | (264,610) | | (157,083) | |
| Profit for the period | 751,676 | | 454,490 | |
| Profit for the period attributable to: | | | | |
| Equity holders of OAO Gazprom | 705,410 | | 426,268 | |
| Minority interest | 46,266 | | 28,222 | |
| | | 751,676 | | 454,490 |
Sales (net of excise tax, VAT and customs duties) increased by RR 912,876 million, or 55%, to RR 2,572,945 million in the nine months ended 30 September 2008 compared to the nine months ended 30 September 2007. More detailed information on our sales for the nine months ended 30 September 2008 and 2007 is presented in the table below.
| in millions of RR (unless otherwise stated) | Nine months ended 30 September | ||
| Sales of gas | 2008 | 2007 | |
| Far Abroad Net sales (net of excise tax and customs duties) | |||
| 992,910 | 596,347 | ||
| Volumes in bcm | 139.3 | 117.1 | |
| Average price, RR/mcm (including excise tax and customs duties) | 9,291.9 | 6,683.6 | |
| FSU | |||
| Net sales (net of excise tax, VAT and customs duties) | 249,315 | 190,374 | |
| Volumes in bcm | 71.9 | 72.0 | |
| Average price, RR/mcm (including excise tax, customs duties and net of VAT) | 3,723.4 | 2,842.3 | |
| Russia | |||
| Net sales (net of excise tax and VAT) | 340,186 | 275,677 | |
| Volumes in bcm | 205.4 | 211.5 | |
| Average price, RR/mcm (including excise tax and net of VAT) | 1,655.8 | 1,303.5 | |
| Total sales of gas | |||
| Net sales (net of excise tax, VAT and customs duties) | 1,582,411 | 1,062,398 | |
| Volumes in bcm | 416.6 | 400.6 | |
| Net sales of refined products (net of excise tax, VAT and customs duties) | 531,528 | 351,954 | |
| Net sales of crude oil and gas condensate (net of excise tax, VAT and customs duties) | 191,085 | 117,956 | |
| Sales of electricity and heat (net of VAT) | 130,903 | 18,854 | |
| Gas transportation sales (net of VAT) | 46,964 | 30,560 | |
| Other revenues (net of VAT) | ___90,054 | ___78,347 | |
| Total sales (net of excise tax, VAT and customs duties) | 2,572,945 | 1,660,069 | |
For the nine months ended 30 September 2008 net sales of gas increased by RR 520,013 million, or 49%, to RR 1,582,411 compared to the nine months ended 30 September 2007. This increase was primarily due to the increase of the volume of gas sold to Far Abroad countries and higher gas prices in all geographical segments.
For the nine months ended 30 September 2008 net sales of gas to Far Abroad countries increased by RR 396,563 million, or 66%, to RR 992,910 million compared to the nine months ended 30 September 2007. This mainly results from the increase of average realized prices in roubles (including excise tax and customs duties) by 39% and the increase of the volume of sold gas by 19%, or 22.2 bcm.
Net sales of gas to FSU countries increased by RR 58,941 million, or 31%, to RR 249,315 million in the nine months ended 30 September 2008 compared to the nine months ended 30 September 2007. The increase of sales in this segment is explained by higher average realized prices.
Net sales of gas in the domestic market increased by RR 64,509 million, or 23%, to RR 340,186 million in the nine months ended 30 September 2008 compared to the nine months ended 30 September 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 179,574 million, or 51%, in the nine months ended 30 September 2008 compared to the nine months ended 30 September 2007. The increase was mainly due to the increase of refined products prices.
Net sales of crude oil and gas condensate increased by RR 73,129 million, or 62%, in the nine months ended 30 September 2008 compared to the nine months ended 30 September 2007. 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 67,199 million, or 65%, to RR 170,259 million in the nine months ended 30 September 2008 compared to the nine months ended 30 September 2007.
Net sales of electricity and heat increased by RR 112,049 million, or 594%, in the nine months ended 30 September 2008 compared to the nine months ended 30 September 2007. The increase in sales of electricity and heat mainly results from operations of Gazprom Germania Group and consolidation of OAO Mosenergo (starting from II half of 2007), ОАО Wholesale Power Generating Company No.2 (ОАО WGC-2) and OAO Wholesale Power Generating Company No.6 (ОАО WGC-6) (starting from III quarter of 2008) as subsidiaries.
Other revenues increased by RR 11,707 million, or 15%, to RR 90,054 million in the nine months ended 30 September 2008 compared to the nine months ended 30 September 2007. Other revenues are very different in composition. This is explained by the fact that the Group includes a lot of companies involved in different types of activities: from science and telecommunication services to machine building and construction.
Operating expenses increased by RR 387,003 million, or 33%, to RR 1,550,246 million in the nine months ended 30 September 2008 compared to the nine months ended 30 September 2007.
Major items whose growth resulted in the increase of the total amount of operating expenses are: Purchased oil and gas (RR 192,883 million), Cost of goods for resale, including refined products (RR 55,808 million), Taxes other than on income (RR 39,171 million), Staff costs (RR 28,047 million), Transit of gas, oil and refined products (RR 25,334 million), Repairs and maintenance (RR 21,701 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 Cost of goods for resale, including refined products, mainly results from operations of Gazprom Germania Group (purchase and sale of electricity) which accounts for 67% of the total increase of operating expenses.
In the nine months ended 30 September 2008 the profit attributable to equity holders of OAO Gazprom for the period totaled RR 705,410 million which is RR 279,142 million, or 65%, higher compared to the nine months ended 30 September 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 360,193 million, or 29%, from RR 1,228,583 million as of 31 December 2007 to RR 868,390 million as of 30 September 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 nine months ended 30 September 2008 can be found on OAO Gazprom web site (www.gazprom.ru).
OAO GAZPROM INFORMATION DIVISION
www.gazprom.ru
_____________________________________________________________________________________________
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