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JSC KazMunaiGas Exp KMG KMG EP 9M 2012 financial results - Replacement

  JSC KazMunaiGas Exp (KMG) - KMG EP 9M 2012 financial results - Replacement

RNS Number : 0715S
JSC KazMunaiGas Exploration Prod
27 November 2012




                                                                             

The following replaces the KMG EP 9M 2012 financial results announcement
released on 21 November under RNS number 6563R.

Changes have been made to the tables in Appendix 3.

The full correct text appears below.

                                      

                               PRESS - RELEASE

                    JSC KazMunaiGas Exploration Production

                    9M 2012financial results

Astana,21 November2012. JSC KazMunaiGas  Exploration Production ("KMG EP"  or 
"the  Company")  announces  its   condensed  consolidated  interim   financial 
statements for the nine months ended September 30, 2012.

· Revenues amounted  to 605 bn  Tenge (US$4,067m)[1], which  is 11%  higher 
compared to the revenues in the same  period of 2011 on higher export  volumes 
and higher domestic prices.

· Net profit amounted to 173bn  Tenge (US$1,163m) and earnings per share  - 
2,480Tenge (US$2.8 per GDR), an increase of 5% and 9%, respectively, compared
to the same period of 2011.



Production Highlights

In the first  nine months of  2012 KMG  EP produced 9,108  thousand tonnes  of 
crude oil (246 kbopd),  including the Company's  stakes in Kazgermunai  (KGM), 
CCEL and PetroKazakhstan Inc. (PKI) which is  1% less than in the same  period 
of 2011.

JSC Uzenmunaigas (UMG) produced 3,699 thousand tonnes (99 kbopd), which is  89 
thousand tonnes less than in the  same period of 2011. JSC Embamunaigas  (EMG) 
produced 2,096thousand  tonnes (56  kbopd), which  is similar  to the  volume 
produced in the same period of 2011.  The total volume of the oil produced  at 
UMG and EMG is 5,795 thousand tonnes (156 kbopd).

Taking into account results of the first nine months of the year, the  Company 
expects annual production in UMG in 2012 to be 4.9 million tonnes (99  kbopd). 
The Company expects  that EMG  will achieve its  initial plan  of 2.8  million 
tonnes. Thus, it is expected that the total volume of the oil produced at  UMG 
and EMG in 2012 will be 7.7 million tonnes (156 kbopd).

The Company's share in  the production from  KGM, CCEL and  PKI for the  first 
nine months of 2012 amounted to 3,313 thousand tonnes of crude oil (91 kbopd),
about the same as in  the first nine months of  2011. The Company's shares  in 
production plans of KGM, CCEL and PKI remain as 4.4 million tonnes (91  kbopd) 
in 2012.



Crude oil sales

In the first nine months of 2012 the Company's export and domestic sales  from 
UMG and EMG were  4,624 thousand tonnes (12  kbopd) and 1,236 thousand  tonnes 
(33 kbopd) respectively.

The Company's share in  the sales from  KGM, CCEL and  PKI was 3,348  thousand 
tonnes of crude oil (93 kbopd), including 2,463 thousand tonnes (68 kbopd)  or 
74% of total sales supplied to export markets.



Net Profit for the Period

Profit after tax (net income) in the first nine months of 2012 was 173bn Tenge
(US$1,163m), representing a 5% increase compared  to the same period of  2011, 
mainly due to  higher export volumes  and higher prices  for domestic  supply, 
partially offset by higher employee costs and income tax expenses.



Revenues

The Company's revenues  in the  first nine months  of 2012  amounted to  605bn 
Tenge (US$4,067m), which is  59bn Tenge higher compared  to those of the  same 
period of 2011. This resulted from the  6% increase in export volumes and  the 
36% increase in domestic selling prices, compared to the same period of 2011.



Taxes other than on Income

Taxes, other than on income, in the first nine months of 2012 were 219bn Tenge
(US$1,472m), which is  almost the same  compared to the  first nine months  of 
2011.



Production Expenses

Production expenses  in  the  first  nine months  of  2012  were  104bn  Tenge 
(US$698m), which  is  18%  higher compared  to  the  same period  of  2011.  A 
significant part of the production costs increase is due to higher expenses on
employee costs and  the decrease in  crude oil balance,  which were  partially 
offset by reduction in  repairs and maintenance expenses  due to reduction  of 
the number of repaired wells and lower repair costs per well.



Selling, General and Administrative Expenses

Selling, general and administrative expenses in the first nine months of  2012 
were 75bn Tenge (US$506m), which  is 2% lower compared  to the same period  of 
2011. The decrease is mainly due to lower expenses for penalties and fines and
lower management fees to National Company Kazmunaigas, partially offset by  an 
increase in  employee costs,  higher transportation  expenses as  a result  of 
higher export volumes and higher expenses for social projects.



Fines and penalties

On July 12, 2012 the Tax Committee of the Ministry of Finance of the  Republic 
of Kazakhstan completed the 2006-2008 comprehensive tax audit of the  Company. 
As a result of  the tax audit,  which was commenced in  October 2011, the  tax 
authorities provided  a  tax  assessment  to  the  Company  of  16.9bn  Tenge, 
including 5.8bn Tenge of  principal, 7.2bn Tenge  of administrative fines  and 
4.0bn Tenge of  late payment interest.  The Company has  begun the process  of 
preparing an appeal to the Tax Committee of the Ministry of Finance.



Cash Flows from Operating Activities

Operating cash flow in the first nine months of 2012 was 95bn Tenge (US$640m),
which is 14% lower compared to the same period of 2011. This is mainly due  to 
increases in working capital and in income taxes paid, partially offset by  an 
increase in revenue.



Capex

Purchases of property, plant and equipment and intangible assets (as per  Cash 
Flow Statement) in the  first nine months of  2012 were 76bn Tenge  (US$513m), 
which is 13% higher compared to the same period of 2011.



Cash and Debt

Cash and cash  equivalents as  at September 30,  2012 amounted  to 72bn  Tenge 
(US$0,5bn) compared to 207bn Tenge (US$1,4bn)as at December 31, 2011.

Other financial assets (current  and non-current) at  September 30, 2012  were 
558bn Tenge (US$3.7bn) compared to 511bn  Tenge (US$3.4bn) as at December  31, 
2011. Other financial assets include the NC KMG Bond, deposits and  additional 
financial instruments. As at September 30, 2012 the outstanding amount of  the 
Bond was 137bn Tenge (US$0.9bn).

87% of cash and financial assets (including the Bond) as at September 30, 2012
were denominated  in foreign  currencies and  13% were  denominated in  Tenge. 
Financial income accrued on cash and financial assets (including the Bond)  in 
the first nine months of 2012 was 23.3bn Tenge (US$157m).

Borrowings as at  September 30, 2012  were 7.5bn Tenge  (US$50m), compared  to 
88bn Tenge (US$593m) as at  December 31, 2011. In  the third quarter of  2012, 
the Company fully repaid its non-recourse debt to KMG PKI Finance B.V. related
to the acquisition of the 33% interest in PKI in December of 2009.

The net  cash position[2]  as at  30 September  2012 amounted  to 623bn  Tenge 
(US$4.2bn) compared to 629bn Tenge (US$4.2bn) as at 31 December 2011.



Income from associates and joint ventures

In the first nine months of 2012, KMG EP's share in income from associates and
joint ventures was 63bn Tenge (US$424m), 10% lower compared to the same period
of 2011. This was mainly driven by decrease of export volumes.



Kazgermunai

In the first nine  months of 2012  KMG EP recognised  31bn Tenge (US$206m)  of 
income from its share inKGM. KGM's net income increased by 3% in the  reported 
period compared  to the  same period  of 2011  mainly due  to lower  operating 
expenses, partially offset by decrease in the export volumes.



PetroKazakhstan Inc.

In the first nine  months of 2012  KMG EP recognised  33bn Tenge (US$221m)  of 
income from its share inPKIPKI's net  income decreased by 13% in the  reported 
period compared to the same period of  2011 mainly due to the decrease in  the 
export volume.



CCEL

As of September 30, 2012 the Company has recognised 19bn Tenge (US$125m) as  a 
receivable from  CCEL,  a jointly  controlled  entity with  CITIC  Group.  The 
Company has accrued 2bn  Tenge (US$14m) of interest  income in the first  nine 
months of 2012 related to the US$26.87m annual priority return from CCEL.

                                     ***

The condensed consolidated  interim financial statements  for the nine  months 
ended September 30, 2012, the notes  thereto, and the operating and  financial 
review for the period is available on the Company's website (www.kmgep.kz).







Appendix[3]

Consolidated Interim Statement of Comprehensive Income (unaudited)

Tenge million

                                       Three months ended   Nine months ended
                                            September 30,       September 30,
                                            2012     2011      2012      2011
Revenue                                  206,099  145,689   604,642   545,747
Share of results of associates and        22,125   21,185    63,030    69,764
joint ventures
Finance income                             6,439    6,801    23,345    22,176
Total revenue and other income           234,663  173,675   691,017   637,687
Production expenses                     (33,087) (25,149) (103,820)  (87,847)
Selling, general and administrative     (29,684) (17,163)  (75,162)  (76,427)
expenses
Exploration expenses                       (731)  (1,951)   (5,057)   (2,629)
Depreciation, depletion and             (14,178) (11,308)  (39,770)  (32,892)
amortization
Taxes other than on income              (74,570) (56,128) (218,842) (217,999)
Loss on disposal of property, plant      (1,408)  (1,269)   (1,808)   (3,398)
and equipment
Finance costs                            (2,628)  (1,676)   (5,601)   (5,465)
Foreign exchange gain, net                 2,235    5,467     6,491       732
Profit before tax                         80,612   64,498   247,448   211,762
Income tax expense                      (29,241) (14,187)  (74,612)  (47,113)
Profit for the period                     51,371   50,311   172,836   164,649
Exchange difference on translating           883    2,282     2,387     1,471
foreign operations
Other comprehensive gain for the            883    2,282     2,387     1,471
period, net of tax
Total comprehensive income for the        52,254   52,593   175,223   166,120
period, net of tax
EARNINGS PER SHARE - Tenge thousands
Basic and diluted                           0.74     0.70      2.48      2.28

Consolidated Interim Statement of Cash Flows (unaudited)

Tenge million

                                               Nine months ended September 30,
                                                                2012      2011
Cash flows from operating activities
Profit before tax                                            247,448   211,762
Adjustments to add / (deduct) non-cash items
Depreciation, depletion and amortisation                      39,770    32,892
Share of result of associates and joint                     (63,030)  (69,764)
ventures
Loss on disposal of property, plant and                        1,808     3,398
equipment (PPE)
Impairment of PPE and intangible assets                         508     1,544
Dry well expense on exploration and evaluation                 3,736       816
assets
Recognition of share-based payments                              266       312
Unrealised foreign exchange gain on                          (5,566)   (2,315)
non-operating activities
Other non-cash income and expense                              1,677     4,755
Add finance costs                                              5,601     5,465
Deduct finance income relating to investing                 (23,345)  (22,176)
activity
Working capital adjustments
Change in other assets                                           175     (550)
Change in inventories                                          4,614   (2,791)
Change in taxes prepaid and VAT recoverable                 (14,026)       600
Change in prepaid expenses                                   (3,929)    13,942
Change in trade and other receivables                       (56,993)   (8,927)
Change in trade and other payables                            18,509   (8,350)
Change in mineral extraction and rent tax                      3,073   (4,800)
payable
Change in provisions                             8,560       7,059
Income tax paid                                             (73,777)  (52,895)
Net cash generated from operating activities                  95,079   109,977
Cash flows from investing activities
Purchases of PPE                                            (67,666)  (57,828)
Proceeds from sale of PPE                                        825       655
Purchases of intangible assets                               (8,645)   (9,643)
Acquisition of share in a joint venture                            -  (23,907)
Loans provided to a joint venture                            (1,724)   (1,206)
Dividends received from joint ventures and                    66,153    55,919
associates
Interest received from investment in Debt                      6,586     6,462
Instruments of NC KMG
(Purchase) / sale of financial assets                      (92,036)    28,911
held-to-maturity
Proceeds from sale of other financial assets                   5,546         -
Repayments of loans receivable from related                    2,856         -
parties
Deferred payment for acquisition of subsidiary                     -     (416)
Interest received                                              2,345     3,701
Net cash (used in) / generated from investing               (85,760)     2,648
activities
Cash flows from financing activities
Share buy back                                              (25,399)  (10,328)
Repayment of borrowings                                     (81,129)  (34,957)
Dividends paid to Company's shareholders                    (33,886)  (19,210)
Interest paid                                                (2,975)   (4,665)
Net cash used in financing activities                      (143,389)  (69,160)
Net change in cash and cash equivalents                    (134,070)    43,465
Cash and cash equivalents at the beginning of                206,512    98,520
the year
Exchange (losses) / gains on cash and cash                       (4)       720
equivalents
Cash and cash equivalents at the end of the                   72,438   142,705
period





Consolidated Interim Statement of Financial Position

Tenge million

                                               September 30, 2012 December 31,
                                                                          2011
                                                        Unaudited      Audited
ASSETS
Non-current assets
Property, plant and equipment                             376,806      338,860
Intangible assets                                          24,852       26,638
Investments in joint ventures                              95,025      116,526
Investments in associates                                 153,243      133,228
Receivable from a jointly                                  17,597       18,138
controlled entity
Loan receivable from a joint                               10,397        8,494
venture
Other financial assets                                      1,068      188,803
Deferred tax asset                                         13,338        9,450
Other assets                                               12,652       19,593
Total non-current assets                                  704,978      859,730
Current assets
Inventories                                                18,215       22,651
Income taxes prepaid                                            -        9,971
Taxes prepaid and VAT                                      36,763       22,738
recoverable
Prepaid expenses                                           15,984       12,054
Trade and other receivables                               141,558       84,126
Receivable from a jointly                                   1,136        1,361
controlled entity
Other financial assets                                    556,970      321,890
Cash and cash equivalents                                  72,438      206,512
Total current assets                                      843,064      681,303
Total assets                                            1,548,042    1,541,033
EQUITY
Share capital                                             173,751      198,452
Other capital reserves         2,390        2,124
Retained earnings                                       1,166,348    1,083,749
Other components of equity                                 16,741       14,354
Total equity                                            1,359,230    1,298,679
LIABILITIES
Non-current liabilities
Borrowings                                                  4,999       33,034
Deferred tax liability                                      1,731        2,049
Provisions                                                 41,122       37,846
Total non-current liabilities                              47,852       72,929
Current liabilities
Borrowings                                                  2,497       54,931
Income taxes payable                                        2,281            -
Mineral extraction tax and                                 53,981       50,908
rent tax payable
Trade and other payables                                   68,213       48,680
Provisions                                                 13,988       14,906
Total current liabilities                                 140,960      169,425
Total liabilities                                         188,812      242,354
Total liabilities and equity                            1,548,042    1,541,033





The following tables show the Company's realised sales prices adjusted for oil
and oil products transportation and other expenses for the first nine months
of 2012 and 2011.



9M 2012, (US$/bbl)                 UAS      CPC Domestic
Benchmark end-market quote[4]  112.24  112.24     -
Sales price                    109.17  109.97   35.06
Quality bank                      -  (7.32)     -
Premium of bbl difference        0.15    8.82     -
Realised price[5]              109.32  111.47   35.06
Rent tax                      (23.73) (24.03)     -
Export customs duty            (5.46)  (4.98)     -
Transportation                 (7.55)  (7.14)  (1.05)
Sales commissions              (0.03)  (0.03)     -
Adjusted realised price         72.55   75.29   34.01
9M 2011, (US$/bbl)                 UAS      CPC Domestic
Benchmark end-market quote4    111.89  111.89     -
Sales price                    106.15  110.40   26.31
Quality bank                      -  (9.28)     -
Premium of bbl difference      (0.12)    9.34     -
Realised price5                106.03  110.46   26.31
Rental tax                    (24.78) (24.84)     -
Export customs duty            (5.10)  (5.10)     -
Transportation                 (7.70)  (7.55)  (1.36)
Sales commissions              (0.07)  (0.07)     -
Adjusted realised price         68.38   72.90   24.95



Reference information                       9M 2012 9M 2011
Average exchange US$/KZT rate                148.66  146.19
End of period US$/KZT rate                   149.86  147.87
Coefficient barrels to tonnes for KMG EP crude         7.36
Coefficient barrels to tonnes for Kazgermunai crude    7.70
Coefficient barrels to tonnes for CCEL crude           6.68
Coefficient barrels to tonnes for PKI crude            7.75



Notes for Editors



KMG EP  is among  the top  three Kazakh  oil and  gas producers.  Its  overall 
production in  2011  was  12.3mt (an  average  of  250 kbopd)  of  crude  oil, 
including the Company's share in Kazgermunai,  CCEL and PKI. The total  volume 
of proved and probable reserves, as at the end of 2011, was 226mt (1.7bn bbl),
including shares in  the associates  of about  2.1 bn  barrels. The  Company's 
shares are listed on the Kazakhstan Stock Exchange and the GDRs are listed  on 
the London  Stock Exchange.  The Company  raised  over US$2bn  in its  IPO  in 
September 2006.  The  international  rating agency  Standard  &  Poor's  (S&P) 
confirmed KMG EP's "BBB-" corporate credit rating in December 2011.





For further details please contact:



Investor Relations (+7 7172 97 54 33)

Asel Kaliyeva

E-mail: ir@kmgep.kz



Public Relations (+7 7172 97 79 15)

Zhuldyz Dzhumadilova

E-mail: pr@kmgep.kz





Forward-looking statements



This  document  includes  statements  that  are,  or  may  be  deemed  to  be, 
''forward-looking  statements''.  These  forward-looking  statements  can   be 
identified by  the  use  of forward-looking  terminology  including,  but  not 
limited  to,   the   terms   ''believes'',   ''estimates'',   ''anticipates'', 
''expects'', ''intends'', ''may'', ''target'', ''will'', or ''should'' or,  in 
each case, their negative or other variations or comparable terminology, or by
discussions  of  strategy,   plans,  objectives,  goals,   future  events   or 
intentions. These forward-looking statements include all matters that are  not 
historical facts. They include, but  are not limited to, statements  regarding 
the Company's  intentions,  beliefs  and statements  of  current  expectations 
concerning,  amongst  other  things,  the  Company's  results  of  operations, 
financial condition,  liquidity,  prospects, growth,  potential  acquisitions, 
strategies and as to  the industries in which  the Company operates. By  their 
nature, forward-looking statements involve  risk and uncertainty because  they 
relate to  future  events  and  circumstances  that  may  or  may  not  occur. 
Forward-looking statements are  not guarantees of  future performance and  the 
actual results of the Company's operations, financial condition and  liquidity 
and the development  of the country  and the industries  in which the  Company 
operates may differ materially from those  described in, or suggested by,  the 
forward-looking statements contained  in this document.  The Company does  not 
intend,  and  does  not  assume  any  obligation,  to  update  or  revise  any 
forward-looking statements or industry information  set out in this  document, 
whether as  a result  of  new information,  future  events or  otherwise.  The 
Company does  not make  any representation,  warranty or  prediction that  the 
results anticipated by such forward-looking statements will be achieved.





------------------------------------------------------------------------------

[1]Amounts shown in US dollars ("US$" or "$") have been translated solely for
the convenience of the reader at  the average rate over the applicable  period 
for information  derived  from  the  consolidated  statements  of  income  and 
consolidated statements  of cash  flows and  the end  of the  period rate  for 
information derived from  the consolidated balance  sheets (average rates  for 
9M12 and 9M11 was 148.66 and 146.19 Tenge/US$, respectively; period-end  rates 
at September 30, 2012 and December  31, 2011 was 149.86 and 148.40  Tenge/US$, 
respectively).

[2] Cash, cash  equivalents and  other financial assets  (including the  Bond) 
less borrowings.

[3] Rounding adjustments have been made  in calculating some of the  financial 
information included in the Appendix. As  a result, figures shown as total  in 
some tables  may not  be exact  arithmetic aggregations  of the  figures  that 
precede them.

[4] The Brent (DTD) quoted price is used as benchmark

[5] Average realized price converted at 7.23 barrels per tonne of crude oil

                     This information is provided by RNS
           The company news service from the London Stock Exchange

END


FR DDLBLLFFFFBV -0- Nov/27/2012 08:02 GMT
 
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