National Joint Stock Company “Naftogaz of Ukraine” has published financial statements for H1 2021

Naftogaz has published interim consolidated Financial Statements for H1 2021
National Joint Stock Company “Naftogaz of Ukraine” has published interim consolidated Financial Statements for H1 2021. The financial statements under IFRS, along with the independent auditor’s report, i.e., of PricewaterhouseCoopers (PwC), have been drafted with no comments.

According to the report, the results for H1 2021 are far better compared to those for the same period in 2020.

Therefore, in Q2 2021, at the beginning of which Yuriy Vitrenko was hired as the CEO, substituting Andriy Kobolyev, Naftogaz received a net profit of UAH 8.5 billion. Over the same period last year, Naftogaz received a net loss of UAH 14.7 billion.

Nonetheless, the net profit in Q2 2021 was less than the net loss in Q1 2021, and, accordingly, the net loss for H1 2021 amounted to UAH 1.7 billion in total. In H1 of year 2020, the net loss made UAH 11.5 billion.

Correspondingly, if we subtract the result of Q2 from the results of H1, it is clear that the net loss for Q1 2021 amounted to UAH 10.2 billion. For the same period in 2020, net profit amounted to UAH 3.2 billion.

It should be recalled that at the end of Q1 2020 Yuriy Vitrenko was de facto suspended from work, and later his position of the Chief Operating Officer of National Joint Stock Company “Naftogaz of Ukraine” was reduced.

It is to be reminded that in 2020 the Company moved from profitable to loss-making one. Thus, the net loss for 2020 amounted to UAH 19 billion, and in 2019 the net profit made UAH 63.3 billion.

At the same time, in 2019, the profits in the area Yuriy Vitrenko was directly in charge of, i.e., gas transit, including the Stockholm arbitration against Gazprom, exceeded the consolidated profit, that is to say, the total financial result in other areas was a net loss of UAH 5.1 billion.

Please be advised that the information on Naftogaz's profit in Q1, which was distributed by the dismissed CEO, some members of the Company's Executive and Supervisory Boards, is incorrect and may mislead the Cabinet of Ministers of Ukraine, investors and public.

Firstly, this information was not on the consolidated statements, but on the separate reports. Secondly, the auditors haven't reviewed the latter at all. It proves once again that one should not trust the dismissed CEO, the members of the Executive and Supervisory Boards who made the misleading announcements.

Naftogaz managed to publish reports within the deadline set by the terms of the Company's Eurobond issue. It was not possible to publish the financial statements earlier because, on the one hand, the Company was seeking to perform a top-quality work while drafting the consolidated statements under IFRS. It is also worth noting that independent auditors were selected during the procurement procedure at Prozorro in February 2021, and, relying on the Company's practice, it takes more time to perform audit procedures if the auditors are changed.

Although Naftogaz has become profitable again under the new management, and the new management is actively working to ensure the Company's financial stability as a guarantee of Naftogaz's strategic objectives, the Company's financial results in 2021 will largely depend on government actions, implementation of “anti-crisis” laws, as well as state regulation of the gas market in general.

While on the subject, we would like to forewarn the stakeholders of the manipulations pertaining to the Naftogaz's financial results, which is actively spread by our opponents. We recommend you to check the accuracy and completeness of the information or use only reliable sources of information, which have the conclusions of reputable independent experts in IRFS.

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