GAZPROM'S PROFIT DOWN 10%
PJSC Gazprom issued its unaudited consolidated interim condensed financial information prepared in accordance with International Accounting Standard 34 Interim Financial Reporting (IAS 34) for the six months ended June 30, 2016.
Total sales (net of excise tax, VAT and customs duties) increased by RUB 150,920 million, or 5%, to RUB 3,064,372 million for the six months ended June 30, 2016 compared to the same period of the prior year. The increase in sales is mainly driven by the increase in sales of gas to Europe and Other countries.
Net sales of gas increased by RUB 136,509 million, or 8%, to RUB 1,755,271 million for the six months ended June 30, 2016 compared to the same period of the prior year.
Net sales of gas to Europe and Other countries increased by RUB 181,651 million, or 19%, to RUB 1,128,271 million for the six months ended June 30, 2016 compared to the same period of the prior year. This was mainly driven by the increase in volumes of gas sold by 36%, or 29.0 bcm, which was partially compensated by the decrease in average Russian Ruble prices (including excise tax and customs duties) by 18%.
Net sales of gas to Former Soviet Union countries decreased by RUB 63,017 million, or 27%, to RUB 166,621 million for the six months ended June 30, 2016 compared to the same period of the prior year. The change was due to the decrease in volumes of gas sold by 22%, or 4.5 bcm, and the decrease in average Russian Ruble prices (including customs duties) by 9%.
Net sales of gas in the Russian Federation decreased by RUB 4,889 million, or 1%, to RUB 420,395 million for the six months ended June 30, 2016 compared to the same period of the prior year. This is primarily explained by the decrease in volumes of gas sold by 9%, or 10.3 bcm, that was partially compensated by the increase in average prices by 8%.
Operating expenses increased by RUB 456,517 million, or 21%, to RUB 2,680,732 million for the six months ended June 30, 2016 compared to the same period of the prior year.
The increase in operating expenses is explained by an increase in a number of items such as:
"Purchased gas and oil" – an increase by RUB 235,407 million due to an increase in expenses for gas as a result of the change in the scope of consolidation related to the completion of the Swap Agreement between PJSC Gazprom and Wintershall Holding GmbH on 30 September 2015;
"Transit of gas, oil and refined products" – an increase by RUB 60,964 million, or 25%.
Profit attributable to the owners of PJSC Gazprom for the six months ended June 30, 2016 totaled RUB 607,160 million which is RUB 68,744 million, or 10% less than for the same period of the prior year.
Net debt balance (defined as the sum of short-term borrowings, current portion of long-term borrowings, short-term promissory notes payable, long-term borrowings, long-term promissory notes payable, net of cash and cash equivalents and balances of cash and cash equivalents restricted as to withdrawal under the terms of certain borrowings and other contractual obligations) decreased by RUB 319,993 million, or 15%, from RUB 2,083,120 million as of December 31, 2015 to RUB 1,763,127 million as of June 30, 2016. This decrease resulted from a change in foreign currency exchange rates (depreciation of US Dollar and Euro).
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BLOOMBERG - While Europe as a whole gets more than a third of its gas from Russia, that share is lower in the U.K., which receives the bulk of its fuel from North Sea fields and Norway. Still, Moscow-based Gazprom PJSC was the second-biggest supplier to major industrial consumers in the U.K. last year, according to Britain’s energy regulator Ofgem.
FT - of the six LNG tankers that have made deliveries into the UK so far in 2018 three have carried cargoes originally from Russia, leading to questions about whether Moscow was gaining a foothold in the UK gas market after starting up the Yamal LNG facility in Siberia late last year.
REUTERS - So far this year, two Yamal cargoes unloaded at British terminals for domestic consumption, accounting for about a third of Britain’s 2018 LNG imports after typical supplier Qatar pre-sold the bulk of its winter output to Asia last year.
REUTERS - U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $60.77 a barrel at 0753 GMT, up 6 cents, or 0.1 percent, from their previous settlement. Brent crude futures LCOc1 were at $64.62 per barrel, down just 2 cents from their last close.