Gazprom Reports Sales Of RUB931.4 Billion For Q1 2009

OAO Gazprom (Gazprom), a Russia-based energy company, has reported sales of RUB931.4 billion for the first quarter of 2009, compared with the sales of RUB911.7 billion in the year-ago quarter. It also reported profit of RUB110.1 billion for the first quarter of 2009, compared with the profit of RUB286 billion in the year-ago quarter.

Net sales of gas increased by RUB80,675 million, or 14%, to RUB676,467 million in the three months ended 31 March 2009 compared to the three months ended 31 March 2008. This increase was primarily due to higher prices for gas in all geographical segments.

For the three months ended 31 March 2009 net sales of gas to Europe and other countries increased by RUB94,202 million, or 28%, to RUB433,239 million compared to the three months ended 31 March 2008. This mainly results from the increase of average realized prices in RUBterms (including excise tax and customs duties) by 55% which was compensated by the decrease of the volume of sold gas by 31%, or 16.4 bcm.

Net sales of gas to FSU countries increased by RUB1,902 million, or 2%, to RUB85,281 million in the three months ended 31 March 2009 compared to the three months ended 31 March 2008. The increase of sales in this segment is explained by higher average realized prices, which was compensated by the decrease of the volume of sold gas by 61%, or 15.3 bcm.

Net sales of gas in the domestic market decreased by RUB15,429 million, or 9%, to RUB157,947 million in the three months ended 31 March 2009 compared to the three months ended 31 March 2008. This is explained primarily by the decrease of the volume of sold gas by 11%, or 11.8 bcm, which was compensated by the increase in the average domestic price for gas set up by the Federal Tariffs Service.

Net sales of refined products decreased by RUB73,359 million, or 43%, in the three months ended 31 March 2009. The decrease was primarily due to the decline in prices for refined products and deconsolidation of the SIBUR Group.

In the three months ended 31 March 2009 net sales of crude oil and gas condensate decreased by RUB21,995 million, or 38%. 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 RUB18,180 million, or 35%, to RUB33,705 million in the three months ended 31 March 2009 compared to the three months ended 31 March 2008.

Net electric and heat energy sales increased by RUB42,861 million, or 106%, in the three months ended 31 March 2009. The increase in electric and heat energy sales mainly resulted from operations of Gazprom Germania Group and OAO Mosenergo, and consolidation as subsidiaries of ??? WGC-2 and ??? WGC-6 (starting from III quarter of 2008).

Other revenues decreased by RUB5,449 million, or 18%, to RUB25,205 million in the three months ended 31 March 2009 compared to the three months ended 31 March 2008. Other revenues are different in their composition. This is explained by the fact that the Group includes a lot of companies involved in different types of activities.

Operating expenses increased by RUB102,687 million, or 19%, to RUB648,810 million in the three months ended 31 March 2009 compared to the three months ended 31 March 2008.

Major items whose growth resulted in the increase of the total amount of operating expenses are: purchased oil and gas (RUB166,111 million). The cost of purchased gas increased by RUB178,530 million, or 174%, and the cost of purchased oil decreased by RUB12,419 million, or 36%. 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 in Europe. This increase was partially compensated by the cost reduction within the following items: taxes other than on income (RUB22,762 million), staff costs (RUB12,480 million), other (RUB44,981 million).

In the three months ended 31 March 2009 the company’s profit for the period attributable to owners of OAO Gazprom totaled RUB103,679 million which is RUB169,760 million, or 62%, lower compared to the three months ended 31 March 2008.

The company’s 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 RUB172,964 million, or 17%, from RUB1,018,346 million as of 31 December 2008 to RUB1,191,310 million as of 31 March 2009. This can be explained primarily by the revaluation of borrowings denominated in foreign currency.