On 25 November 2005 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 six months ended 30 June 2005.
During the period December 2003 to November 2005, the International Accounting Standards Board (“IASB”) revised 17 of its standards and issued 7 new standards. The accompanying financial information was prepared in accordance with the new and revised IFRS standards which were effective from 1 January 2005 and are relevant to the operations of the Group. Moreover, Gazprom Group adopted early IFRS 6 Exploration and Evaluation of Mineral Resources from 1 January 2005.
The table below presents the unaudited consolidated interim condensed statements of income for the six months ended 30 June 2005 and 2004. All amounts are presented in millions of Russian Roubles, unless otherwise stated.
|
Six months ended |
|
30 June |
2005 |
2004 |
Sales (net of excise tax, VAT and customs duties) |
611,233 |
471,474 |
Operating expenses |
(402,178) |
(349,072) |
Operating profit |
209,055 |
122,402 |
|
|
|
Finance income |
25,788 |
30,261, |
Finance expenses |
(33,568) |
(28,387) |
Share of net income of associated undertakings |
8,943 |
3,122 |
Gains on available for sale investments |
1,427 |
4,296 |
Profit before profit tax |
211,645 |
131,694 |
|
|
|
Current profit tax expense |
(51,081) |
(26,179) |
Deferred profit tax expense |
(6,565) |
(12,610) |
Profit tax expense |
(57,646) |
(38,789) |
Profit for the period |
153,999 |
92,905 |
|
|
|
Profit for the period attributable to: |
|
|
Equity holders of OAO Gazprom |
152,810 |
92,258 |
Minority interest |
1,189 |
647 |
|
153,999 |
92,905 |
Sales (net of excise, VAT and customs duties) increased by RR139,759 million, or 30%, to RR611,233 million in the six months ended 30 June 2005 compared to the six months ended 30 June 2004. More detailed information on our sales for the six months ended 30June 2005 and 2004 is presented in the table below.
in million RR (unless otherwise stated) |
Six months ended 30 June |
Sales of gas |
2005 |
2004 |
Europe |
|
|
Net sale (net of excise tax and customs duties) |
287,143 |
215,941 |
Volumes in bcm |
81.4 |
78.8 |
Average price, RR/mcm (including excise tax and customs duties) |
4,876.1 |
3,722.1 |
Former Soviet Union |
|
|
Net sales (net of excise tax, VAT and customs duties) |
45,797 |
29,689 |
Volumes in bcm |
36.4 |
29.4 |
Average price, RR/mcm (including excise tax, customs duties and net of VAT) |
1,490.6 |
1,363.1 |
Russia |
|
|
Net sales (net of excise tax and VAT) |
163,016 |
133,472 |
Volumes in bcm |
162.1 |
163.0 |
Average price, RR/mcm (including excise tax and net of VAT) |
1,012.8 |
827.6 |
Total sales of gas |
|
|
Net sales (net of excise tax, VAT and customs duties) |
495,956 |
379,102 |
Volumes in bcm |
279.9 |
271.2 |
|
|
|
Sales of gas condensate and other oil and gas products (net of excise tax, VAT and customs duties) |
74,108 |
54,968 |
Gas transportation sales (net of VAT) |
12,181 |
15,297 |
Other sales (net of VAT) |
28,988 |
22,107 |
Total sales (net of excise tax, VAT and customs duties) |
611,233 |
471,474 |
Net sales of natural gas increased by RR116,854million, or 31%, to RR495,956 million in the six months ended 30 June 2005 compared to the six months ended 30 June2004. This increase was primarily due to higher European and domestic prices for gas as well as higher volumes of sold gas.
Net sales of natural gas to Europe increased by RR71,202million, or 33%, to RR287,143million in the six months ended 30 June 2005 compared to the six months ended 30 June 2004. The increase was primarily due to higher average prices for gas to European customers and the 3% increase in the volume of sold gas.
Net sales of natural gas to FSU countries increased by RR16,108 million, or 54%, to RR45,797million in the six months ended 30 June 2005 compared to the six months ended 30June 2004. The current year increase is primarily a result of the temporary cessation of gas deliveries to Belarus, which occurred in the six months ended 30 June 2004.
Net sales of natural gas in the domestic market increased by RR29,544million, or 22%, to RR163,016million in the six months ended 30 June 2005 compared to the six months ended 30June2004. The increase is due to increased average domestic price for gas as established by the Federal Tariff Service.
In the six months ended 30 June 2005 sales of gas condensate and oil and gas products increased by RR19,140 million, or 35%, primarily due to increased market prices for oil and gas products in the six months ended 30 June 2005 compared to the six months ended 30June2004.
Operating expenses increased by RR53,106 million, or 15%, to RR402,178 million in the six months ended 30 June 2005 compared to the six months ended 30 June 2004.
The increase in operating expenses was primarily due to higher taxes other than on income (RR8,889 million), higher purchased gas expenses (RR3,009 million), higher expenses on repairs and maintenance (RR10,324 million) and increased depreciation charges (RR4,876 million). The increase in taxes other than on income was primarily due to changes in the tax legislation related to natural resources production tax which was enacted from 1 January 2005. The increase in the cost of purchased gas was driven by increased purchases of gas in Central Asia and Europe for resale to customers in Western Europe and FSU. The increase in expenses on repairs and maintenance resulted from increased volumes of work performed by external service contractors primarily in the transportation segment.
Profit tax increased by RR18,857 million, or 49%, to RR57,646 million in the six months ended 30 June 2005 compared to RR38,789 million for the six months ended 30 June 2004. Our effective profit tax rate for the six months ended 30June 2005 was 27.2% compared to 29.5% for the six months ended 30June 2004.
In the six months ended 30 June 2005 our profit for the period attributable to equity holders of OAO Gazprom totaled RR152,810 million which is RR60,552 million, or 66%, higher compared to the six months ended 30 June 2004.
Our 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 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) decreased by RR33,544million, or 7%, from RR499,855million as of 31December 2004 to RR466,311million as of 30 June 2005. The decrease in net debt was a result of increased inflow of cash from core operations.
In October 2005 the Group increased its ownership interest in OAO Sibneft to 75.68% by acquiring an additional 72.66% interest for USD 13,079 million paid in cash, borrowed from a syndicate of banks.
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