Gazprom posts IFRS net profit of RUB1.10 trillion in 9M 2019.

On November 29, 2019, PJSC Gazprom issued its unaudited consolidated interim condensed financial information prepared in accordance with International Accounting Standard 34 Interim Financial Reporting (IAS 34) for the nine months ended on September 30, 2019.

Sales (net of excise tax, VAT, and customs duties) decreased by RUB203,252 million, or three percent, to RUB5,698,339 million for the nine months ended September 30, 2019 compared to the corresponding period of the prior year. The decrease in sales was mainly due to a change in volumes sold and a change in average prices.

Net sales of gas decreased by RUB241,966 million, or eight percent, to RUB2,808,726 million for the first nine months of 2019 compared to the corresponding period of the prior year. The change was mainly due to a decrease in volumes of gas sold and a decrease in average prices on sales of gas in Europe and other countries.

Net sales of gas to Europe and other countries decreased by RUB256,545 million, or 12 percent, to RUB1,883,980 million for the nine months of 2019 compared to the corresponding period of the previous year. The change was due to the decrease in volumes of gas sold by eight percent, or 14.0 billion cubic meters (bcm), and the decrease in average prices (including excise tax and customs duties) denominated in the Russian ruble by five percent. At the same time, average prices denominated in the U.S. dollar decreased by 10 percent.

Net sales of gas to former Soviet Union countries increased by RUB15,004 million, or six percent, to RUB250,612 million for the nine months of 2019 compared to the corresponding period of 2018. The change was mainly due to the increase in average prices (including customs duties) denominated in the Russian ruble by eight percent (average prices denominated in the U.S. dollar increased by two percent).

Net sales of gas in the Russian Federation increased by RUB29,252 million, or five percent, to RUB666,125 million for the first nine months of 2019 compared to the corresponding period of the prior year. This change is mainly explained by the increase in average prices denominated in the Russian ruble.

Operating expenses increased by RUB167,952 million to RUB4,617,986 million for the nine months of 2019 compared to the corresponding period of the prior year.

The increase in operating expenses is primarily explained by a change in the item “Foreign exchange rate differences on operating items.” The foreign exchange rate loss on operating items amounted to RUB68,013 million for the nine months of 2019 compared to the foreign exchange gain in the amount of RUB20,573 million for the corresponding period of the prior year. The change was mainly due to the revaluation of accounts receivable from foreign customers.

The increase in the item “Depreciation” by RUB48,908 million for the nine months of 2019 compared to the corresponding period of the prior year was mainly due to charging the depreciation of right-of-use assets caused by the application of IFRS 16 Leases rules since January 1, 2019.

The increase in the item “Taxes other than on profit” by RUB8,218 million for the nine months of 2019 compared to the corresponding period of the prior year was caused by the increase in the mineral extraction tax by RUB45,371 million. The change in the latter tax figure was partially compensated by the decrease in the excise tax by RUB39,639 million for the nine months of 2019 compared to the corresponding period of the prior year.

The balance of foreign exchange rate differences reflected within the item “Net finance income (expense)” produced a gain in the amount of RUB230,816 million for the nine months of 2019 compared to the loss in the amount of RUB234,374 million for the corresponding period of the prior year.

The profit attributable to the owners of PJSC Gazprom amounted to RUB1,048,286 million for the nine months of 2019, which is RUB31,036 million, or three percent, more than for the corresponding period of the prior year.

The net debt balance (defined as the sum of short-term borrowings, the current portion of long-term borrowings, short-term promissory notes payable, long-term borrowings, long-term promissory notes payable, net of cash and cash equivalents) decreased by RUB156,648 million, or five percent, from RUB3,014,403 million as of December 31, 2018 to RUB2,857,755 million as of September 30, 2019. This change was mainly due to an increase in cash and cash equivalents balances.