Novatek Quarterly Profit More Than Doubles on Output Growth

OAO Novatek, Russia’s second-largest natural gas producer, said second-quarter profit more than doubled as output and sales prices rose.

Net income rose to 32 billion rubles ($898 million) in the three months ending June 30, against 11.6 billion rubles a year earlier, the Tarko-Sale, Russia-based company said in an e-mailed statement. That beat the 27.1 billion-ruble average estimate of 11 analysts surveyed by Bloomberg.

“The growth was mainly due to an increase in average prices for natural gas and liquid hydrocarbons, as well as higher liquid hydrocarbons sales volumes,” Novatek said in the statement. The Ust-Luga condensate plant started in June 2013 has given Novatek access to higher sales prices for liquids.

The U.S. imposed sanctions on Novatek earlier this month restricting its access to capital markets as it adopts a harder line over the Kremlin’s support for pro-Russian separatists in eastern Ukraine. The move follows U.S. travel and financial restrictions placed on billionaire shareholder Gennady Timchenko earlier this year following Russia’s annexation of Crimea.

Inclusion on the U.S. sanctions list does not impede the group’s operations or business activity or have a material effect on Novatek’s financial position, the company said in a statement on its website.

Novatek liquids output rose 13 percent to 1.36 million metric tons in the second quarter against the previous year, according to a July 10 statement. Natural gas output climbed 2.6 percent to 15.6 billion cubic meters in the period.

Before it's here, it's on the Bloomberg Terminal.