NVTK: OAO Novatek: NOVATEK Announces Consolidated IFRS Results for First Quarter 2014 UK Regulatory Announcement MOSCOW NOVATEK ANNOUNCES CONSOLIDATED IFRS RESULTS FOR FIRST QUARTER 2014 Moscow, 29 April 2014. OAO NOVATEK today released its consolidated interim condensed financial information as of and for the three months ended 31 March 2014 prepared in accordance with International Financial Reporting Standards (“IFRS”). IFRS Financial and Operational Highlights (in millions of Russian roubles) 1Q 2014 1Q 2013 Oil and gas sales 88,533 80,448 Other revenues 143 117 Total revenues 88,676 80,565 Operating expenses (53,875) (51,056) Net gain on disposal of interests in joint ventures 2,623 - Other operating income (loss) (41) 691 Profit from operations 37,383 30,200 Normalized EBITDA of subsidiaries* 38,967 32,857 Normalized EBITDA including share in EBITDA of joint 42,979 34,860 ventures* Finance expense (4,320) (1,924) Share of profit (loss) of joint ventures, (1,762) 163 net of income tax Profit before income tax 31,301 28,439 Profit 25,109 22,813 Profit attributable 25,115 22,826 to OAO NOVATEK shareholders Normalized Profit attributable 23,016 22,826 to OAO NOVATEK shareholders* Basic and diluted earnings per share ^ 8.30 7.53 (in Russian roubles) Normalized basic and diluted earnings per share* 7.60 7.53 (in Russian roubles) * Excluding the effect from disposal of interests in joint ventures. In the first quarter 2014, our total revenues increased by 10.1% to RR 88.7 billion compared to RR80.6 billion in the corresponding period of 2013. The growth was mainly due to an increase in average prices for natural gas and liquid hydrocarbons partially driven by the start of sales of higher value added products following the launch of the Ust-Luga Gas Condensate Fractionation and Transshipment Complex. The Company’s Normalized EBITDA inclusive of subsidiaries (adjusted for the gain on disposal of a 20% share in Artic Russia B.V.) amounted to RR 39.0 billion, representing a 18.6% increase compared to the first quarter 2013. The Normalized EBITDA including our respective share in the EBITDA of joint ventures increased by 23.3% as compared to the first quarter 2013 to RR 43.0billion. The growth in our Normalized EBITDA including our respective share in the EBITDA of joint ventures was positively impacted by higher liquids sales margins due to the launch of the Ust-Luga Complex, significant increase in natural gas and gas condensate production at the North-Urengoyskoye field of the Nortgas joint venture and oil production growth at the East-Tarkosalinskoye field, as well as an increase in the Company’s share in the SeverEnergia joint venture. The Company’s divestment of its share in the Sibneftegas joint venture in December 2013 produced a negative impact on our EBITDA. In the first quarter 2014, Normalized Profit attributable to NOVATEK shareholders (adjusted for the effect on disposal of the share in Artic Russia B.V.), increased by 0.8% to RR 23.0 billion, or RR 7.60 per share. Our profit dynamics was negatively impacted by a non-cash foreign exchange loss (including a loss recorded at the joint ventures level) due to the significant depreciation of the Russian ruble against the US dollar in the first quarter 2014. Net of this non-cash foreign exchange loss our Normalized Profit increased by 23.7%. Selected Operating Highlights Production and Purchased Volumes 1Q 2014 1Q 2013 Natural gas production by subsidiaries, 13,398 13,665 million cubic meters (mmcm) Natural gas purchases from joint ventures, mmcm 284 1,953 Other purchases of natural gas, mmcm 1,677 2,114 Total natural gas production and purchases, mmcm 15,359 17,732 Liquids production by subsidiaries, thousand tons (mt) 1,094 1,096 Liquids purchases from joint ventures, mt 496 239 Other purchases of liquids, mt 7 2 Total liquids production and purchases, mt 1,597 1,337 Sales Volumes 1Q 2014 1Q 2013 Natural gas, mmcm 17,772 18,739 including sales to end-users, mmcm 16,677 16,632 Stable gas condensate products, mt 965 - Liquefied petroleum gas, mt 351 265 Crude oil, mt 195 137 Stable gas condensate, mt 32 1,210 Other oil products, mt 2 2 In the first quarter 2014, our natural gas sales volumes decreased to 17.8 billion cubic meters (bcm), or by 5.2%, as compared with the corresponding period in 2013, mainly due to the termination of natural gas purchases from the Sibneftegas joint venture. As at 31 March 2014, the total amount of natural gas recorded as inventory aggregated 837 mmcm as compared to 3,296 mmcm at the end of 2013. Liquid hydrocarbon sales volumes aggregated 1,545 thousand tons in the first quarter 2014 representing a decrease of 4.3% as compared with the first quarter 2013 due to a decrease in our liquid inventory balances in the first quarter 2013, which was largely offset by an increase in production and purchases of liquid hydrocarbons in the first quarter 2014 by 19.4% as compared to the first quarter 2013. As at 31 March 2014, 434 thousand tons of stable gas condensate and oil products were in transit or storage and recognized as inventory. Selected Balance Sheet Items (in millions of Russian roubles) 31 March 2014 31 December 2013 ASSETS Non-current assets 487,949 515,569 Property, plant and equipment 253,343 243,688 Investments in joint ventures 175,954 210,066 Total current assets 134,958 82,426 Total assets 622,907 597,995 LIABILITIES AND EQUITY Non-current liabilities 192,088 165,065 Long-term debt 166,812 141,595 Current liabilities 33,804 59,873 Total liabilities 225,892 224,938 Equity attributable to 394,271 370,198 OAO NOVATEK shareholders Non-controlling interest 2,744 2,859 Total equity 397,015 373,057 Total liabilities and equity 622,907 597,995 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 visit www.novatek.ru or contact: Press Service Investor Relations +7 (495) 721 2207 +7 (495) 730 6013 IR@novatek.ru email@example.com *** 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 Moscow Exchange (MOEX) and the London Stock Exchange (LSE) under the ticker symbol «NVTK». Contact: OAO Novatek
NVTK: OAO Novatek: NOVATEK Announces Consolidated IFRS Results for First Quarter 2014
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