NVTK: OAO Novatek: NOVATEK announces second quarter and first half 2013 IFRS results

  NVTK: OAO Novatek: NOVATEK announces second quarter and first half 2013 IFRS
  results

UK Regulatory Announcement

MOSCOW

                       NOVATEK ANNOUNCES SECOND QUARTER

                       AND FIRST HALF 2013 IFRS RESULTS

Moscow, 09 August 2013. OAO NOVATEK today released its consolidated interim
condensed financial information for the three and six months ended 30 June
2013 prepared in accordance with International Financial Reporting Standards
(“IFRS”).

                  IFRS Financial and Operational Highlights

           (in millions of Russian roubles unless otherwise stated)

2Q 2013   2Q 2012                                 1H 2013   1H 2012   
                      Revenues
57,918     44,763     Oil and gas sales               138,366    98,639
112        161        Other revenues                  229        382
58,030     44,924     Total revenues                  138,595    99,021
(39,613)   (26,559)   Total operating expenses        (90,669)   (58,134)
(34)       (36)       Other operating income (loss)   657        5
18,383     18,329     Profit from operations          48,583     40,892
21,141     20,414     EBITDA                          54,161     44,631
(3,455)    (5,597)    Total finance income            (5,379)    27
                      (expense)
14,456     12,211     Profit before income tax        42,895     39,407
11,583     9,657      Profit (loss)                   34,396     30,896
11,602     9,663      Profit (loss) attributable to   34,428     30,908
                      shareholders of OAO NOVATEK
                      Basic and diluted earnings
3.83       3.18       per share                       11.36      10.19

                      (in Russian roubles)

Total revenues in the second quarter and first half 2013 increased by 29.2%
and 40.0%, respectively, as compared to the corresponding periods in 2012. The
growth in total revenues was mainly due to increase in natural gas sales
volumes and higher average natural gas prices as a result of significant
expansion of the share of end-users in our total gas volumes sales mix.
Revenues growth in the first half 2013 was also due to an increase in liquid
hydrocarbon sales volumes.

In the second quarter 2013, we recorded a year-on-year increase of 3.6% in
EBITDA, which amounted to RR 21.1 billion. The lower EBITDA growth rate was
mainly due to a decrease in the share of liquid hydrocarbons in our total
sales volumes mix, which was driven by an increase in inventory balances of
stable gas condensate and the corresponding oil products processed following
the launch of the first stage of the Gas Condensate Fractionation and
Transshipment Complex at the port of Ust-Luga in late June. In the first half
2013, EBITDA amounted to RR 54.2 billion, representing an increase of 21.4% as
compared with the first half 2012.

Profit attributable to shareholders of OAO NOVATEK in the second quarter 2013
increased to RR 11.6 billion (RR 3.83 per share), or by 20.1%, as compared to
the second quarter 2012. Profit attributable to shareholders of OAO NOVATEK in
the first half 2013 increased to RR 34.4 billion (RR 11.36 per share), or by
11.4%, as compared to the first half 2012. The dynamics of profit was impacted
by non-cash foreign exchange effect.

                       Production and Purchase Volumes

2Q 2013  2Q 2012                                    1H 2013  1H 2012  
                    Natural gas production,
12,784   12,458                                        26,449    25,503
                    million cubic meters (mmcm)
1,870    1,268     Natural gas purchases from joint    3,823     2,677
                    ventures, mmcm
1,365    800       Other purchases of natural gas,     3,479     1,700
                    mmcm
16,019   14,526    Total natural gas production and    33,751    29,880
                    purchases, mmcm
1,103    1,027     Liquids production, thousand tons   2,199     2,107
                    (mt)
265      58        Liquids purchases from joint        504       58
                    ventures, mt
2        3         Other purchases of liquids, mt      4         5
1,370    1,088     Total liquids production and        2,707     2,170
                    purchases, mt

                                Sales Volumes

2Q 2013  2Q 2012                                    1H 2013  1H 2012  
14,628   13,447    Natural gas, mmcm                   33,367    29,497
13,008   8,361     including sales to end-users,       29,640    20,533
                    mmcm
632      794       Stable gas condensate, mt           1,842     1,418
261      224       Liquefied petroleum gas, mt         526       462
164      101       Crude oil, mt                       301       185

In the second quarter and first half 2013, our natural gas sales volumes
increased by 8.8% and 13.1%, respectively, as compared to the corresponding
periods in 2012, due to growth in production at the Yurkharovskoye field and
an increase in purchases of natural gas. At 30 June 2013, we recorded 1,411
million cubic meters of natural gas as inventory in underground storages as
compared to 1,050 million cubic meters in the corresponding period of 2012.

In the second quarter 2013, our total liquid hydrocarbon sales volumes
decreased by 5.4%, as compared to the corresponding period in 2012, despite
higher production volumes. The decrease was primarily due to inventory
build-up following the start of stable gas condensate processing at the
Ust-Luga Complex. Liquid hydrocarbon sales volumes in the first half 2013,
increased by 29.2% compared to the corresponding period in 2012. The increase
was mainly due to the commencement of gas condensate purchases from joint
ventures and production growth from our subsidiaries. At 30 June 2013, 447
thousand tons of stable gas condensate and oil products were in transit or
storage and recognized as inventory, as compared with 295 thousand tons of
stable gas condensate as at 30 June 2012.

                           Selected Items from the

                       Statement of Financial Position

                       (in millions of Russian roubles)

                              30 June 2013  31 December 2012
ASSETS
Non-current assets              439,666        404,890
Property, plant and equipment   222,806        197,376
Investments in joint ventures   193,330        189,136
Current assets                  47,198         58,243
Total assets                    486,864        463,133
LIABILITIES AND EQUITY
Non-current liabilities         153,688        116,702
Long-term debt                  132,619        97,805
Current liabilities             20,116         55,130
Total liabilities               173,804        171,832
Equity attributable to
                                311,841        290,050
OAO NOVATEK shareholders
Non-controlling interest        1,219          1,251
Total equity                    313,060        291,301
Total liabilities and equity    486,864        463,133

The full set of consolidated interim condensed IFRS financial information, 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 contact:

Press Service
+7 (495) 721 2207   Investor Relations
press@novatek.ru   +7 (495) 730 6013
                    IR@novatek.ru


                                     ***

OAO NOVATEK is Russia’s largest independent gas producer and the
second-largest natural gas producer in Russia. 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 in the prolific Yamal-Nenets Autonomous Region, which is the
world’s largest natural gas producing area and accounts for approximately 90%
of Russia’s natural gas production and approximately 17% of the world’s gas
production. NOVATEK is an open joint stock company established under the laws
of the Russian Federation. The Company’s shares are listed in Russia on
MICEX-RTS Stock Exchange and the London Stock Exchange (LSE) under the ticker
symbol “NVTK”.

Contact:

OAO Novatek
 
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