Naftogaz Doubles H1 Profit Yr-Yr

State utility Naftogaz Ukrainy made a first-half profit after tax of hryvnia 24.7bn ($1.01bn), almost doubling its earnings from the same period last year, it said September 24. Its integrated gas business earned hryvnia 22.9bn, and its gas transit business hryvnia 12.5bn, both pre-tax. Pretax profit was 31.9bn m³, which was 79% more than the same period last year. 

The amount of gas transited was up 6% and totalled 45.1bn m³, thanks to greater gas demand in Europe.  Naftogaz earned about hryvnia 2.6bn more, at hryvnia 12.5bn. The second half of the year should see a much bigger jump in this sector's profits as Gazprom is having to transit more gas through Ukraine to offset the loss of Opal pipeline capacity.

Earnings from domestic transport were down hryvnia 3.1bn owing to lower volumes and debt write-offs related to the significant amount of unpaid balancing services. As of June 30, debtors owed hryvnia 13.8bn more – 49.5% – for balancing servicesз than at the same date last year.

Storage withdrawals were 5.2bn m³ or  2.1 bn m³ (29%) less than in the same period last year, that being the time the 'beast from the east' struck, and when Russia under-delivered gas to Ukraine for transit, causing a pressure drop and forcing withdrawals. And it has been able to inject more gas as well. The division earned hryvnia 1bn more owing to a change in the tariff for storage but the business remains unprofitable, losing hryvnia 100mn.

The total amount of gas sold under Naftogaz' public service obligation (PSO) was down to 1.2bn m³, or 11% compared with the same period last year. Changes in the gas procurement structure and own production, as well as lower costs of procurement in the first half led to a reduction in the overall value of the gas sold under the PSO of hryvnia 6.4bn.

The amount owed to the company rose 14.9% or by hryvnia 8.4bn compared with H1 2018, mainly owing to rising debt of the district heating companies following higher prices for this category of consumer.

Naftogaz also sold 500mn m³ less gas to consumers outside the PSO, which cut hryvnia 3bn from that business. It paid hryvnia 58.6bn in taxes, which was about 16% of the total paid in the period.