Financial Results for 2006

28 Jun 2007 15:08

Oao Gazprom28 June 2007 RELEASE 28.06.2007 Moscow GAZPROM REPORTS ITS CONSOLIDATED FINANCIAL RESULTS UNDER INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS) FOR 2006 On 28 June 2007 OAO Gazprom issued its audited consolidated financial statementsfor 2006 prepared in accordance with International Financial ReportingStandards. A significant factor impacting the comparability of the consolidated financialstatements of Gazprom Group for 2006 with 2005 was the acquisition in October2005 of OAO Sibneft (from June 2006 - OAO Gazprom Neft). Higher oil and gasmarket prices also significantly impacted the results. The table below presents the audited consolidated statement of income for 2006and 2005. All amounts are presented in millions of Russian Roubles, unlessotherwise stated. Year ended 31 December 2006 2005 Sales (net of excise tax, value added tax (VAT) and customs duties) 2,152,111 1,383,545Operating expenses (1,363,923) (929,561)Operating profit 788,188 453,984 Finance income 97,923 53,890Finance expenses (65,220) (69,926)Share of net income of associated undertakings and jointly controlled entities 26,363 11,782Gain on disposal of available-for-sale financial assets 8,811 385Profit before profit tax 856,065 450,115 Current profit tax expense (213,844) (118,028)Deferred profit tax expense (5,760) (16,156)Profit tax expense (219,604) (134,184)Profit for the period 636,461 315,931 Profit for the period attributable to:Equity holders of OAO Gazprom 613,345 311,125Minority interest 23,116 4,806 636,461 315,931 Sales (net of excise tax, VAT and customs duties) increased by RR768,566million, or 56%, to RR2,152,111 million in 2006 compared to 2005. More detailedinformation on our sales for 2006 and 2005 is presented in the table below. in million RR (unless otherwise stated) Year ended 31 DecemberSales of gas 2006 2005EuropeNet sales (net of excise tax and customs duties) 845,867 619,099Volumes in bcm 161.5 156.1Gross average price, RR/mcm (including excise tax and customs duties) 7,119.4 5,443.6 FSUNet sales (net of excise tax, VAT and customs duties) 209,719 108,391Volumes in bcm 101.0 76.6Gross average price, RR/mcm (including excise tax, customs duties and net of VAT) 2,408.4 1,716.1 RussiaNet sales (net of excise tax and VAT) 356,033 309,985Volumes in bcm 316.3 307.0Gross average price, RR/mcm (including excise tax and net of VAT) 1,129.4 1,014.1 Total sales of gasNet sales (net of excise tax, VAT and customs duties) 1,411,619 1,037,475Volumes in bcm 578.8 539.7 Net sales of refined products (net of excise tax, VAT and customs duties) 434,985 202,870Net sales of crude oil and gas condensate (net of excise tax, VAT and customs 171,709 52,591duties)Gas transportation sales (net of VAT) 34,500 25,050Other revenues (net of VAT) 99,298 65,559Total sales (net of excise tax, VAT and customs duties) 2,152,111 1,383,545 Net sales of gas increased by RR374,144 million, or 36%, to RR1,411,619 millionin 2006 compared to 2005. This increase was primarily due to higher European andFSU prices for gas as well as higher volumes of gas sold. Net sales of gas to Europe increased by RR226,768 million, or 37%, to RR845,867million in 2006 compared to 2005. This was primarily due to higher gross averageprices for gas to European customers and the 3% increase in the volume of gassold. Net sales of gas to FSU countries increased by RR101,328 million, or 93%, toRR209,719 million in 2006 compared to 2005. The increase of sales in thissegment is explained by higher prices and higher sales volumes. Net sales of gas in the domestic market increased by RR46,048 million, or 15%,to RR356,033 million in 2006 compared to 2005. This is explained primarily byincreased average domestic price for gas established by the Federal TariffService, and increased volumes. In 2006, net sales of refined products increased by RR232,115 million, primarilydue to the consolidation of Gazprom Neft as well as increased market prices forrefined products in 2006 compared to 2005. In 2006, net sales of crude oil and gas condensate increased by RR119,118million. The increase in sales of crude oil is explained by the consolidation ofGazprom Neft starting from October 2005. Operating expenses increased by RR434,362 million, or 47%, to RR1,363,923million in 2006 compared to 2005 primarily due to the consolidation of GazpromNeft's results from the date control was established by the Group - startingfrom Q4, 2005. The increase in operating expenses included higher expenses on purchased oil andgas (RR192,339 million, including Gazprom Neft - RR66,801 million), highertaxes other than on income (RR73,279 million, including Gazprom Neft - RR58,076million), higher expenses on transit of gas, oil and refined products (RR45,626million, including Gazprom Neft - RR34,946 million), higher depreciation(RR42,663 million, including Gazprom Neft - RR35,413 million), and higher staffcosts (RR31,512 million). The increase in purchased oil and gas was caused bythe appearance of a new type of expenses - "purchased oil" - due toconsolidation of Gazprom Neft, and increase in cost of gas purchased in CentralAsia. The increase in taxes other than on income was primarily due toconsolidation of Gazprom Neft and changes in tax legislation related to naturalresources production tax effective from 1 January 2006. The increase inexpenses on transit of gas, oil and refined products was primarily due toconsolidation of Gazprom Neft as well as a general increase in gas volumes soldto Europe and FSU customers and the growth of transit tariffs. The increase inthe staff costs resulted from the increase in average base salaries and otherpayments and the increase in average number of employees. The profit tax expense increased by RR85,420 million, or 64%, to RR219,604million in 2006 compared to RR134,184 million in 2005. Our total effectiveprofit tax rate in 2006 was 25.7% compared to 29.8% in 2005. 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) increased by RR10,349 million, or 1%, from RR797,465million as of 31 December 2005 to RR807,814 million as of 31 December 2006. More detailed information on the IFRS consolidated financial statements for 2006can be found on OAO Gazprom web site (www.gazprom.ru). 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) 719-28-01pr@gazprom.ru ir@gazprom.ru This information is provided by RNS The company news service from the London Stock Exchange