Yamal LNG Boosts Novatek's Q1 Business
Russia's biggest independent gas producer Novatek reported a 30.5% rise in its first-quarter revenues compared with Q1 2018, and a 54.6% rise in pre-tax profits (Ebitda) April 25, as the Yamal LNG project reached completion over the year. Profits might have been even better had the LNG not arrived in a depressed market, with both European and Asian spot prices down sharply on the same period last year.
Novatek said revenues totalled roubles 234.1bn ($3.6bn) and normalised Ebitda, including its share in Ebitda from joint ventures, was roubles 117.9bn. It said the increases were "largely due to the production launch at the second and third LNG trains at Yamal LNG in the second half of 2018, as well as increases in our sales volumes and net realized prices in Russian roubles terms for the majority of our liquids."
Shareholders received nine times more, roubles 381.8bn, compared with Q1 2108, which was "primarily due to the recognition of a net gain on disposal of a 10% participation interest in the Arctic LNG 2 project in March 2019 in the amount of roubles 308.6bn, as well as the recognition of non-cash foreign exchange effects on foreign currency denominated loans of the group and its joint ventures in both reporting periods.
In March, French Total took a 10% stake, and since then two Chinese companies have each taken 19% as well, leaving Novatek with 70%.
Excluding the effects from the disposal of interests in subsidiaries and joint ventures and foreign exchange differences, the normalised profit attributable to shareholders rose 40% to roubles 65.7bn.
Capital expenditure rose by 337.4% to roubles 42.5bn. In both reporting periods, much of the money was spent on its Arctic LNG project and the "plant to build plants" in Murmansk, as well as the North-Russkoye field.
Total gas and liquids production rose by 13.0% and 1.7%, respectively on Q1 2018. Gas was up from 16.5bn m³ to 18.7bn m³ over the quarter, mainly because of the launch of LNG production at the second and third LNG trains at Yamal LNG in the second half of 2018.