Naftogaz Group 2020 half-year results: net loss of UAH 11.5 billion

Naftogaz reports consolidated net loss of UAH 11.5 billion after tax for the six months ended 30 June 2020. The six months of 2020 were characterised by: ...

Naftogaz reports consolidated net loss of UAH 11.5 billion after tax for the six months ended 30 June 2020. The six months of 2020 were characterised by:

· 7.2 bcm gross gas production and 9.4 bcm of gas sold;

· Significant drop in gas and oil prices;

· Cash flows generated by operating activities amount to UAH 15.6 billion;

· Total contribution to the State Budget exceeded UAH 75.5 billion.

· Total dividends paid to the State Budget in 2020 were UAH 39.6 billion, which together with UAH 8.5 billion dividend prepaid in 2019 comprise 95% of net profit for 2019.

SUMMARY OF RESULTS

in UAH billion H1 2020 H1 2019 Variance
Net profit from continuing operations (11.5) 17.6 (29.2)
Segment Adjusted EBITDA (1.8) 28.8 (30.6)
Cash flows generated by operating activities 15.8 48.8 (33.0)
Free cash flows 6.9 35.5 (28.6)
Capital expenditures 7.8 16.1 8.3
  30 Jun 2020 31 Dec 2019 variance
Net debt 14.4 42.6 28.2
Gearing, % 4.1% 9.8% 5.7

Naftogaz Chief Financial Officer Peter van Driel commented: “Naftogaz has delivered a solid cash flow in a challenging environment with a noticeable impact from COVID-19 and weaker gas prices and demand. We paid an attractive dividend of UAH 39.6 billion to our shareholder, the State of Ukraine.

We continue to focus on protecting our people and reliable operations. Our priority is discipline in capital spending, reduction of operating costs, and more efficient and effective operations as part of our transformation journey.”

PERFORMANCE BY SEGMENT


Segment Adjusted EBITDA by segment was as follows:

in UAH billion H1 2020 H1 2019 variance
Exploration and production 10.9 25.1 (14.2)
Oil midstream and downstream 0.6 1.5 (0.9)
Commercial (9.0) 3.1 (12.1)
Gas storage 0.7 0.1 0.6
Ukrnafta (2.3) 0.8 (3.1)
Other (2.7) (1.8) (0.9)
Total (1.8) 28.8 (30.6)

Exploration and production result reflected lower gas prices, partially offset by lower subsoil royalties as compared to the first six months of 2019.

Oil midstream and downstream result suffered from lower petroleum products prices. Cost savings have offset the impact to a certain extent.

Commercial was negatively impacted by lower volumes and prices as well as higher provisions for receivables.

Gas storage reflected higher revenues from pumping and storage services due an increased demand.

Ukrnafta’s result were negatively impacted by lower gas prices and lower volumes of crude oil sold.

Other activities include transit related services and product sharing agreement with the Arab Republic of Egypt and Egyptian General Petroleum Corporation.

ADDITIONAL INFORMATION

Contributions to the State Budget. In 2020, the Group transferred to the State Budget UAH 75.5 billion of taxes and dividends, including UAH 11.1 billion of corporate income tax.

In the first half of 2020 the Group paid dividends of UAH 39.6 billion. Including the UAH 8.5 billion dividend prepayment in 2019, Naftogaz remitted 95% of its net profit for year 2019.

The Group remains one of the largest net contributors to the State Budget of Ukraine.

The Group Unaudited Condensed Consolidated Interim Financial Statements as at and for the six months ended 30 June 2020 is available here.

Integrated Communications Department
NJSC Naftogaz of Ukraine




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