Novatek’s profits bumped by Arctic LNG 2 stake sale

Novatek, Russia’s largest private gas producer, reported a jump in profit for the second quarter of the year. 

The company reported a net profit of 69.2 billion Russian rubles ($1 billion) for the quarter and 451 billion Russian rubles ($7.1 billion) for the first half of the year, which compares to 32 billion Russian rubles in the second quarter and 74 billion Russian rubles in the first half of 2018.

The profit was significantly impacted by the recognition of a net gain on disposal of a 10 percent participation interest in Arctic LNG 2 project in March 2019 in the amount of 308.6 billion Russian rubles, and the recognition of non-cash foreign exchange effects on foreign currency-denominated loans of the group and its joint ventures in both reporting periods.

Excluding the effects of the stake sale, the profit rose by 18.4 and 28.5 percent in the second quarter and the first six months of the year, respectively, when compared to the corresponding period in 2018.

In the second quarter of 2019, Novatek’s revenues amounted to 218.5 billion Russian rubles ($3.5 billion) representing an increase of 11.6 percent as compared to the corresponding period in 2018.

Total revenues during the six months ended June 30, 2019, amounted to 452.6 billion Russian rubles ($7.2 billion), representing an increase of 20.6 percent over the prior-year reporting period.

The increases in total revenues were largely due to the production launch at the second and third LNG trains at Yamal LNG in the second half of 2018, Novatek said.