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PAO Novatek (NVTK)

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Wednesday 19 February, 2020

PAO Novatek

Final Results

RNS Number : 4829D
PAO Novatek
19 February 2020
 

 

 

FOR IMMEDIATE RELEASE

 

NOVATEK Announces Consolidated IFRS Results
for the Year Ended 31 December 2019

 

Moscow, 19 February 2020. PAO NOVATEK today released its audited consolidated financial statements for the year ended 31 December 2019 prepared in accordance with International Financial Reporting Standards ("IFRS"). 

 

IFRS Financial Highlights
(in millions of Russian roubles except as stated)


FY 2019 

FY 2018 

Oil and gas sales

852,232 

825,761 

Other revenues

10,571 

5,997 

Total revenues

862,803 

831,758 

Operating expenses

(640,463)

(603,912)

Net gain on disposal of interests in subsidiaries and joint ventures

682,733 

1,645 

Other operating income (loss)

(35,484)

(2,307)

Normalized profit from operations *

221,398 

225,539 

Normalized EBITDA of subsidiaries *

253,552 

259,370 

Normalized EBITDA including s hare in

EBITDA of joint ventures *

461,157 

415,296 

Finance income (expense)

(15,712)

38,608 

Share of profit (loss) of joint ventures, net of income tax

149,238 

(37,258)

Profit before income tax

1,003,115 

228,534 

P rofit attributable to

shareholders of PAO NOVATEK

865,477 

163,742 

Normalized p rofit attributable to
shareholders of PAO NOVATEK
* ,
excluding the effect of foreign exchange gains (losses)

245,002 

232,930 

Normalized basic and diluted earnings per share*,
excluding the effect of foreign exchange gains (losses)
(in Russian roubles)

81.35 

77.29 

Cash used for capital expenditures

162,502 

94,038 

* Excluding the effects from disposal of interests in subsidiaries and joint ventures (recognition of a net gain on disposal and subsequent non-cash revaluation of contingent consideration).

 



 

Revenues and EBITDA

 

In 2019, our total revenues and Normalized EBITDA, including our share in EBITDA of joint ventures, increased to RR 862.8 billion and RR 461.2 billion, or by 3.7% and 11.0%, respectively, as compared to 2018.

 

The increases in total revenues and Normalized EBITDA were largely due to an increase in our natural gas sales volumes primarily resulted from the production launch at the second and third LNG trains at Yamal LNG in July and November 2018, respectively, and an increase in our domestic average natural gas sales price. The impact of these factors was offset by a decrease in hydrocarbons sales prices on international markets in 2019.

 

Profit attributable to shareholders of PAO NOVATEK

 

Profit attributable to shareholders of PAO NOVATEK increased to RR 865.5   billion (RR 287.39 per share), or 5.3 times, as compared to 2018. The Group's profit in 2019 was significantly affected by the sale of a 40% participation interest in Arctic LNG 2 project and the reorganization of our joint venture Arcticgas. In addition, in both reporting periods, the Group's subsidiaries and joint ventures recognised substantial non-cash foreign exchange effects on foreign currency denominated loans and cash balances.

 

Excluding the effects from the disposal of interests in subsidiaries and joint ventures, as well as foreign exchange differences, Normalized profit attributable to shareholders of PAO NOVATEK increased to RR 245.0 billion (RR 81.35 per share), or by 5.2%, as compared to 2018.

 

Cash used for capital expenditures

 

Our cash used for capital expenditures increased by RR 68.5 billion, or 72.8%, to RR 162.5 billion in 2019 as compared to RR 94.0 billion in 2018. A significant portion of our capital expenditures related to the development of our LNG projects (Arctic LNG 2 prior to March 2019, the LNG construction center located in the Murmansk region and the Obskiy LNG project), the North-Russkoye field, the Beregovoye field, crude oil deposits of the East-Tarkosalinskoye and the Yarudeyskoye fields, and exploratory drilling.

 

 

Hydrocarbon Production and Purchased Volumes

 


FY 2019 

FY 2018 

Total hydrocarbon production,

million barrels of oil equivalent (million boe)

589.9 

549.1 

Total production (million boe per day)

1.62 

1.50 

Natural gas production including proportionate share in

the production of joint ventures, million cubic meters (mmcm)

74,700 

68,806 

Natural gas production by subsidiaries

39,389 

41,860 

Natural gas purchases from joint ventures

31,296 

24,892 

Other purchases of natural gas

8,544 

8,119 

Total natural gas production by subsidiaries

and purchases (mmcm)

79,229 

74,871 

Liquids production including proportionate share in

the production of joint ventures, thousand tons (mt)

12,148 

11,800 

Liquids production by subsidiaries

6,480 

6,546 

Liquids purchases from joint ventures

9,566 

9,368 

Other purchases of liquids

242 

226 

Total liquids production by subsidiaries and purchases (mt)

16,288 

16,140 

 

In 2019, our total natural gas and liquids production including our proportionate share in the production of joint ventures increased by 8.6% and 2.9%, respectively, as compared to 2018. The main factors positively affecting the production increase were the launch of LNG production at the second and third LNG trains at Yamal LNG in July and November 2018, respectively, and the commencement of crude oil commercial production at the Yaro-Yakhinskoye field of our joint venture Arcticgas in December 2018.



 

Hydrocarbon Sales Volumes


FY 2019 

FY 2018 

Natural gas (mmcm)

78,452 

72,134 

including:

 

 

Sales in the Russian Federation

65,653 

66,073 

Sales on international markets

12,799 

6,061 

Liquids (mt)

16,355 

15,822 

including:



Stable gas condensate refined products

6,981 

6,683 

Crude oil

4,834 

4,542 

Liquefied petroleum gas

2,777 

2,676 

Stable gas condensate

1,739 

1,908 

Other oil products

24 

13 

 

In 2019, our natural gas sales volumes totaled 78.5 billion cubic meters (bcm), representing an increase of 8.8% as compared to 2018 , due to an increase in LNG sales volumes purchased mainly from our joint ventures OAO Yamal LNG and OOO Cryogas-Vysotsk. As at 31 December 2019, we recorded 1.2 bcm of natural gas in inventory balances compared to 2.2 bcm at 31 December 2018 relating mainly to natural gas in the Underground Gas Storage Facilities. Natural gas inventory balances depend on the Group's demand for natural gas withdrawals for the sale in the subsequent periods.

 

In 2019, our liquid hydrocarbons sales volumes totaled 16.4 million tons, representing an increase of 3.4%, as compared to 2018. The increase was mainly due to crude oil purchases from our joint venture Arcticgas resulting from the commencement of crude oil production at the Yaro-Yakhinskoye field in December 2018. As at 31 December 2019, we recorded 801 mt of liquid hydrocarbons in transit or storage and recognized as inventory as compared to 1,069 mt at 31 December 2018. Our liquid hydrocarbon inventory balances tend to fluctuate period on period and are usually realized in the following reporting period.

 

 



Selected Items of Consolidated Statement of Financial Position

(in millions of Russian roubles)

 


31 December 2019

31 December 2018

ASSETS



Non-current assets

1,516,371

923,050

Property, plant and equipment

556,798

408,201

Investments in joint ventures

585,340

244,500

Long-term loans and receivables

231,898

232,922

Current assets

496,496

293,320

Total assets

2,012,867

1,216,370

LIABILITIES AND EQUITY



Non-current liabilities

228,678

222,752

Long-term debt

139,852

170,043

Current liabilities

117,113

107,023

Total liabilities

345,791

329,775

Equity attributable to
PAO NOVATEK shareholders

 

1,647,509

868,254

Non-controlling interest

19,567

18,341

Total equity

1,667,076

886,595

Total liabilities and equity

2,012,867

1,216,370

 

The full set of audited consolidated IFRS financial statements for the year ended 31 December 2019, the notes thereto and Management's Discussion and Analysis of Financial Condition and Results of Operations are available on the Company's web site ( www.novatek.ru ).

 

***

For further information, please visit www.novatek.ru or contact:

Press Service
+7 (495) 721 2207
[email protected]

Investor Relations
+7 (495) 730 6013
[email protected]

***

PAO NOVATEK is the largest independent natural gas producer in Russia, and in 2017, entered the global LNG market by successfully launching the Yamal LNG project. Founded in 1994, the Company is engaged in the exploration, production, processing and marketing of natural gas and liquid hydrocarbons. The Company's upstream activities are concentrated mainly in the prolific Yamal-Nenets Autonomous Region, which is the world's largest natural gas producing area and accounts for approximately 80% of Russia's natural gas production and approximately 15% of the world's gas production. NOVATEK is a public joint stock company established under the laws of the Russian Federation. The Company's shares are listed in Russia on Moscow Exchange (MOEX) and the London Stock Exchange (LSE) under the ticker symbol «NVTK».


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