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Gazprom’s 2019 net profit falls to 1.2 trillion roubles

Today PJSC Gazprom issued its audited consolidated financial statements prepared in accordance with International Financial Reporting Standards for the year ended December 31, 2019.

The table below presents the consolidated statement of comprehensive income prepared in accordance with IFRS for the years ended December 31, 2019 and December 31, 2018. All amounts are presented in millions of the Russian Rubles.

Sales (net of excise tax, VAT and customs duties) decreased by RUB 564,554 million, or 7%, to RUB 7,659,623 million for the year ended December 31, 2019 compared to the year ended December 31, 2018. The decrease in sales was mainly due to a decrease in sales of gas to Europe and other countries.

More detailed information concerning the main items of the sales structure for the years ended December 31, 2019 and December 31, 2018 is presented below.

Net sales of gas decreased by RUB 502,941 million, or 12%, to RUB 3,800,730 million for the year ended December 31, 2019 compared to the year ended December 31, 2018, that was mainly due to a decrease in average prices and volumes of gas sold in the segment Europe and other countries.

Net sales of gas to Europe and other countries decreased by RUB 460,843 million, or 16%, to RUB 2,490,372 million for the year ended December 31, 2019 compared to the year ended December 31, 2018. The change was mainly due to the decrease in average prices (including excise tax and customs duties) denominated in the Russian Ruble by 12% and the decrease in volumes of gas sold by 4 %, or 10.9 bcm. At the same time average prices denominated in US Dollar decreased by 15%.

Net sales of gas to Former Soviet Union countries increased by RUB 7,477 million, or 2%, to RUB 356,102 million for the year ended December 31, 2019 compared to the year ended December 31, 2018. The change was mainly due to the increase in volumes of gas sold by 2%, or 0.6 bcm.

Net sales of gas in the Russian Federation increased by RUB 16,420 million, or 2%, to RUB 970,913 million for the year ended December 31, 2019 compared to the year ended December 31, 2018. This change was explained by the increase in average prices by 3% that was partially compensated by the 2 % decrease in volumes of gas sold, or 3.9 bcm.

Operating expenses increased by RUB 205,880 million, or 3%, to RUB 6,387,071 million for the year ended December 31, 2019 compared to the year ended December 31, 2018.

The change in operating expenses is primarily caused by an increase in the item “Staff costs” by RUB 148,896 million, or 25%, for the year ended December 31, 2019 compared to the year ended December 31, 2018. The increase was mainly due to the recognition of income from change in provision for post-employment benefits for the year ended December 31, 2018 caused by the increase in a retirement age according to the legislation of the Russian Federation.

The item “Foreign exchange differences on operating items” increased by RUB 106,316 million for the year ended December 31, 2019 compared to the year ended December 31 ,2018 due to the revaluation of accounts receivable from foreign customers and loans issued, which was mainly caused by the depreciation of the US Dollar and the Euro against the Russian Ruble by 11 % and 13 %, respectively, for the year ended December 31, 2019 compared to the appreciation of the US Dollar and the Euro against the Russian Ruble by 21 % and 15 %, respectively, for the year ended December 31, 2018.

The item “Depreciation” increased by RUB 67,236 million for the year ended December 31, 2019 compared to the year ended December 31,2018, that was mainly due to charging of depreciation of right-of-use assets caused by the application of IFRS 16 Leases since January 1, 2019.

The balance of foreign exchange differences reflected within the item “Net finance income (expense)” produced the gain in the amount of RUB 285,581 million for the year ended December 31, 2019 compared to the loss of RUB 332,225 million for the year ended December 31, 2018. There were the depreciation of US Dollar and Euro against the Russian Ruble by 11 % and 13 %, respectively, for the reporting year compared to the appreciation of US Dollar and Euro against the Russian Ruble by 21 % and 15 %, respectively, for the prior year.

Profit attributable to the owners of PJSC Gazprom for the year ended December 31, 2019 amounted to RUB 1,202,887 million which is by RUB 253,383 million, or 17 %, less than for the year ended December 31, 2018.

Net debt balance (defined as the sum of short-term borrowings, 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) increased by RUB 153,444 million, or 5%, from RUB 3,014,403 million as of December 31, 2018 to RUB 3,167,847 million as of December 31, 2019. This change was mainly due to a decrease in cash and cash equivalents balances.
Source: Gazprom

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