Gazprom reports its consolidated interim condensed financial results under international financial reporting standards (IFRS) for the nine months ended 30 September 2009
01.02.2010 10:00
On 1 February 2010 OAO Gazprom issued its unaudited consolidated interim condensed financial information prepared in accordance with International Accounting Standard 34 “Interim Financial Reporting” (IAS 34) for the nine months ended 30 September 2009.

The table below presents the unaudited consolidated interim condensed statement of comprehensive income prepared in accordance with IFRS for the nine months ended 30 September 2009 and 2008. All amounts are presented in millions of Russian Roubles.

Nine months ended
30 September
2009 2008
Sales (net of excise tax, VAT and customs duties) 2,410,490 2,594,276
Operating expenses (1,821,656) (1,571,577)
Operating profit 588,834 1,022,699
Purchase of non-controlling interest in OAO Gazprom neft
13,865 –
Loss from change in fair value of call option – (41,973)
Finance income 339,679 114,692
Finance expenses (383,245) (141,236)
Share of net income of associated undertakings and jointly controlled entities 43,040 41,215
Gains on disposal of available-for-sale financial assets 2,321 20,889
Profit before profit tax 604,494 1,016,286
Current profit tax expense (120,112) (259,348)
Deferred profit tax (5,093) (5,262)
Profit tax expense (125,205) (264,610)
Profit for the period 479,289 751,676
Other comprehensive income


Gains (losses) arising from change in fair value of available-for-sale financial assets, net of tax 22,831 (57,840)
Share of other comprehensive income (losses) of associated undertakings and jointly controlled entities 4,331 (1,593)
Translation differences (3,337) 2,005
Revaluation of equity interest 9,911 –
Other comprehensive income (loss) for the period, net of tax
33,736 (57,428)
Total comprehensive income for the period 513,025 694,248
Profit attributable to:


owners of OAO Gazprom 470,874 705,410
non-controlling interest 8,415 46,266

479,289 751,676
Total comprehensive income attributable to:


owners of OAO Gazprom 509,265 647,618
non-controlling interest 3,760 46,630

513,025 694,248

Sales (net of excise tax, VAT and customs duties) decreased by RR 183,786 million, or 7%, to RR 2,410,490 million in the nine months ended 30 September 2009 compared to the same period of the prior year. More detailed information on our sales for the nine months ended 30 September 2009 and 2008 is presented in the table below.

in millions of RR (unless otherwise stated) Nine months ended 30 September
2009 2008
Sales of gas


Europe and other countries


Net sales (net of excise tax and customs duties) 995,816 992,910
Volumes in bcm 123.3 139.3
Average price, RR/mcm (including excise tax and customs duties) 9,752.9 9,291.9
FSU


Net sales (net of excise tax, VAT and customs duties) 225,758 249,315
Volumes in bcm 36.3 71.9
Average price, RR/mcm (including excise tax, customs duties and net of VAT) 6,976.2 3,723.4
Russia


Net sales (net of excise tax and VAT) 325,964 340,186
Volumes in bcm 183.7 205.4
Average price, RR/mcm (including excise tax and net of VAT) 1,774.7 1,655.8
Total sales of gas


Net sales (net of excise tax, VAT and customs duties) 1,547,538 1,582,411
Volumes in bcm 343.3 416.6
Net sales of refined products (net of excise tax, VAT and customs duties) 402,361 552,859
Net sales of crude oil and gas condensate (net of excise tax, VAT and customs duties) 122,336 191,085
Net sales of electric and heat energy (net of VAT) 209,221 130,903
Gas transportation sales (net of VAT) 41,563 46,964
Other revenues (net of VAT) 87,471 90,054
Total sales (net of excise tax, VAT and customs duties) 2,410,490 2,594,276

Net sales of gas decreased by RR 34,873 million, or 2%, to RR 1,547,538 million in the nine months ended 30 September 2009 compared to the nine months ended 30 September 2008. This reduction was primarily due to decrease of the volume of gas sold in all geographical segments. With that, average realized gas prices in RR terms were higher in all geographical segments in the nine months ended 30 September 2009 compared to the nine months ended 30 September 2008.

In the nine months ended 30 September 2009 net sales of gas to Europe and other countries increased by RR 2,906 million to RR 995,816 million compared to the nine months ended 30 September 2008. This mainly results from the increase of average realized prices in RR terms (including excise tax and customs duties) by 5% which was compensated by the decrease of the volume of gas sold by 11%, or 16.0 bcm. The increase in net sales of gas to this geographical segment is achieved mainly by the increase in prices during the first quarter of 2009.

Net sales of gas to FSU countries decreased by RR 23,557 million, or 9%, to RR 225,758 million in the nine months ended 30 September 2009 compared to the nine months ended 30 September 2008. The decrease of sales to this segment is explained by the decrease of the volume of gas sold by 50%, or 35.6 bcm, which was compensated by the increase of average realized prices (including excise tax, customs duties and net of VAT) by 87%.

Net sales of gas in the domestic market decreased by RR 14,222 million, or 4%, to RR 325,964 million in the nine months ended 30 September 2009 compared to the nine months ended 30 September 2008. This is explained primarily by the decrease of the volume of gas sold by 11%, or 21.7 bcm, which was partly compensated by the increase in the average domestic price for gas set by the Federal Tariffs Service.

Net sales of refined products decreased by RR 150,498 million, or 27%, to RR 402,361 million in the nine months ended 30 September 2009 compared to the nine months ended 30 September 2008. The decrease was primarily due to the deconsolidation of the SIBUR Group and the decline in prices for refined products.

In the nine months ended 30 September 2009 net sales of crude oil and gas condensate decreased by RR 68,749 million, or 36%, to RR 122,336 million in the nine months ended 30 September 2009 compared to the nine months ended 30 September 2008. The decrease of net sales of crude oil and gas condensate primarily resulted from the Gazprom Neft activities: net sales of crude oil decreased by RR 56,753 million, or 33%, to RR 113,506 million in the nine months ended 30 September 2009 compared to the nine months ended 30 September 2008.

Net sales of electric and heat energy increased by RR 78,318 million, or 60%, in the nine months ended 30 September 2009. The increase in electric and heat energy sales mainly resulted from operations of Gazprom Germania Group and OAO Mosenergo, and consolidation of ОАО WGC-2 and ОАО WGC-6 as subsidiaries.

Operating expenses increased by RR 250,079 million, or 16%, to RR 1,821,656 million in the nine months ended 30 September 2009 compared to the nine months ended 30 September 2008.

Major item the growth of which resulted in the increase of the total amount of operating expenses is purchased gas and oil (RR 191,257 million). The cost of purchased gas increased by RR 213,546 million, or 64%, and the cost of purchased oil decreased by RR 22,289 million, or 17%. The increase in cost of purchased gas was mainly caused by the increase in prices for gas from Central Asia and increase in gas trading activities on the European market and respective increase of gas purchases. There was also increase in the following items: costs of goods for resale, including refined products (RR 35,061 million), transit of gas, oil and refined products (RR 29,432 million), depreciation (RR 10,211 million), other operating expenses (RR 28,122 million). This increase was partially compensated by the cost reduction within the following items: taxes other than on income (RR 35,191 million – this change is explained by decrease of natural resources production tax by RR 53,856 million), electricity and heating expenses (RR 7,945 million), repairs and maintenance (RR 7,412 million), materials (RR 4,421 million).

In the nine months ended 30 September 2009 our profit for the period attributable to owners of OAO Gazprom totaled RR 470,874 million which is RR 234,536 million, or 33%, less compared to the nine months ended 30 September 2008.

Our net debt balance (defined as the sum of short-term borrowings, including current portion of long-term borrowings, short-term promissory notes payable, long-term borrowings, long-term promissory notes payable and restructured tax liabilities, 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) increased by RR 450,745 million, or 44%, from RR 1,018,346 million as of 31 December 2008 to RR 1,469,091 million as of 30 September 2009. This can be explained primarily by the increase in long-term borrowings.

More detailed information on the IFRS consolidated interim condensed financial information for the three months ended 30 September 2009 can be found here.