Russian Companies Continue Posting Increase in Sales, Plunge in Profit
While Ukraine increases the gas stored in its UGS facilities for the first time in some months, Russian and Kazakh companies keep posting mixed figures for 2014, hinting at two simultaneous trends. On the one hand, they report an increase in sales. On the other hand, their profits keep going down due to significant impairment and the weakness of the ruble.
These facts could suggest that in the medium term, Russian companies could significantly increase their exports.
On Tuesday, for example, Lukoil reported a year-on-year 1.9 increase in sales revenues.
“Net income in 2014 was negatively affected by $2,341 million non-cash losses due to asset impairment in Russia, Ukraine, Western Africa and Kazakhstan. Excluding the non-cash losses net income was $7,087 mln and EBITDA was $18,426 mln” the Russian company wrote on Tuesday.
The net income plunged from 7,627 millions of US dollars in 2013 to 4,714 millions of US dollars in 2014.
Similarly, Astana-based KazMunaiGas reported good production results, but a 67% year-on-year decrease in net profit for 2014.
‘Revenue in 2014 was 846bn Tenge (US$4,722m), a 4% increase compared with 2013, mainly due to an increase in the average domestic sales price by 20% and higher export price in Tenge’ reads the press release.
The results also indicate that the fourth quarter has been the most difficult for Russian companies. Analysts expect that Russian players could undergo financial problems in the winter of 2015.
UKRAINE: CUTTING CONSUMPTIONS, INCREASING STORED GAS
Meanwhile, Ukraine was the only country reporting an increase in stored gas according to Gas Infrastructure Europe. Data suggest that Kiev is trying to maintain 8,000 mcm of gas in its facility, accounting for around 25% of the total storage capacity in the country. The government and the public company are also trying to decrease gas usage in the country.
According to a note released by Naftogaz on Tuesday, the country decreased by 16% its gas usage in February in comparison to the same period of 2014.
‘Ukrainian industrial consumers, government financed institutions, district heating companies and households used 4.43 billion cubic meters (bcm) of natural gas in February 2015, down 16% versus the previous year.’