NOVATEK, the largest independent natural gas producer in Russia, today released its consolidated interim condensed financial statements as of and for the three months ended 31 March 2020 prepared in accordance with International Financial Reporting Standards (IFRS).
As noted on its website, “Global markets have experienced financial and economic disruptions caused by the spread of COVID-19, and the mandated shutdowns by many governments. This negative economic impact has lowered demand for crude oil, natural gas and oil products, which combined with the increase in the supply of crude oil due to the cancellation of the OPEC+ production agreement in the first quarter of 2020, resulted in a decline in global hydrocarbon commodity prices. As of 31 March 2020, the Russian ruble significantly depreciated against the US dollar and the Euro which produced impact on foreign currency denominated loans by the NOVATEK’s subsidiaries and joint ventures.”
NOVATEK’s total revenues and normalized EBITDA, including its share in EBITDA of joint ventures, decreased to RUR 184.6 bln ($2.5 bln) and RUR 100.7 bln ($1.35 bln), or by 21.2% and 14.6%, respectively, as compared to a year ago. The decreases in total revenues and normalized EBITDA were largely due to a decline in world prices for hydrocarbons and to a decrease in LNG sales volumes on international markets.
In the first quarter of 2020, the company recorded a loss attributable to its shareholders, of RUR 30.7 bln ($410 mio) as compared to a profit of RUR 381.8 bln in the corresponding period in 2019. The Group’s financial results in the current reporting period were significantly impacted by the unfavorable macroeconomic conditions, which resulted in a decrease in its hydrocarbons sales prices and a recognition of substantial foreign exchange effects.
Normalized profit attributable to company shareholders amounted to RUR 53.5 bln ($720 mio), representing a decrease of 18.5% as compared to the first quarter in 2019.
NOVATEK’s aggregate natural gas production including its proportionate share in the production of joint ventures increased by 2.2% compared to the corresponding period in 2019, while the total liquids production including proportionate share in the production of joint ventures increased by 2.0%. Its natural gas sales totaled 20.7 bln cubic meters (decrease of 6.8% as compared to 2019). Natural gas volumes sold on the domestic market decreased by 0.5 bcm, or by 2.9% because of a lower demand from end-customers due to warmer winter. The liquid hydrocarbons sales volumes totaled 4 mio tons, representing a marginal increase of 0.7% against 2019 first quarter.