RELEASE

Gazprom’s consolidated financial statements under International Financial Reporting Standards (IFRS) for the year ended December 31, 2014

April 29, 2015, 10:00

Today OAO Gazprom issued its audited consolidated financial statements prepared in accordance with International Financial Reporting Standards for the year ended December 31, 2014.

The table below presents the consolidated statement of comprehensive income prepared in accordance with IFRS for the years ended December 31, 2014 and 2013. All amounts are presented in millions of Russian Rubles.

 

Year ended December 31,

2014 2013

Sales

5,589,811

5,249,965

Net (loss) gain from trading activity

(22,510)

5,850

Operating expenses

(3,943,669)

(3,600,908)

Charge for impairment and other provisions, net

(313,208)

(67,698)

Operating profit

1,310,424

1,587,209

     

Finance income

389,804

129,523

Finance expense

(1,438,541)

(284,107)

Share of net income of associated undertakings and joint ventures

46,051

56,670

Losses on disposal of available-for-sale financial assets

(915)

(3,212)

Profit before profit tax

306,823

1,486,083

     

Current profit tax expense

(121,343)

(201,872)

Deferred profit tax expense

(28,288)

(118,506)

Profit tax expense

(149,631)

(320,378)

Profit for the year

157,192

1,165,705

     

Other comprehensive income (loss):

   

Items that will not be reclassified to profit or loss:

   

Remeasurements of post-employment benefit obligations

34,438

55,424

Total items that will not be reclassified to profit or loss

34,438

55,424

     

Items that will be reclassified to profit or loss:

   

(Losses) gains arising from change in fair value of available-for-sale financial assets, net of tax

(2,933)

12,578

Share of other comprehensive (loss) income of associated undertakings and joint ventures

(14,769)

10,100

Translation differences

570,402

56,847

Losses from cash flow hedges, net of tax

(60,550)

(2,305)

Total items that will be reclassified to profit or loss

492,150

77,220

Other comprehensive income for the year, net of tax

526,588

132,644

Total comprehensive income for the year

683,780

1,298,349

     

Profit (loss) attributable to:

   

Owners of OAO Gazprom

159,004

1,139,261

Non-controlling interest

(1,812)

26,444

 

157,192

1,165,705

     

Total comprehensive income attributable to:

   

Owners of OAO Gazprom

667,609

1,267,383

Non-controlling interest

16,171

30,966

 

683,780

1,298,349

Profit for the period attributable to owners of OAO Gazprom decreased by RUB 980,257 million, or 86%, and amounted to RUB 159,004 million in the year ended December 31, 2014, mostly due to the following factors:

  • increase in foreign exchange differences expenses due to appreciation of US dollar and Euro against Ruble. Net exchange loss included in finance income and expense increased by RUB 925,757 million in the year ended December 31, 2014 as compared with the year ended December 31, 2013. Increase in expenses on foreign exchange differences is due to the revaluation of the foreign denominated borrowings.
  • increase in charge for impairment and other provisions by RUB 245,510 million. Such an increase includes charge for impairment provision of accounts receivable of NAK Naftogaz Ukraine in the amount of RUB 34,068 million, AO Moldovagaz in the amount of RUB 5,948 million, and charge for provision under financial guarantees in the amount of RUB 47,407 million. Furthermore, the Group recognized a loss from impairment of fixed assets and goodwill in oil production, refining and electric and heat energy generation and sale segments in the amount of RUB 124,002 million.

Total operating profit decreased by RUB 276,785 million, or 17%.

Total sales (net of VAT, excise tax and customs duties) increased by RUB 339,846 million, or 6%, to RUB 5,589,811 million in the year ended December 31, 2014 as compared with the prior year. More detailed information on sales for the years ended December 31, 2014 and 2013 is presented in the table below.

In millions of RUB (unless otherwise stated)

Year ended

December 31,

 

2014

2013

Sales of gas

   

Europe and other countries

   

Net sales (net of customs duties)

1,752,147

1,682,761

Volumes in bcm

159.4

174.3

Average price, RUB/mcm (including customs duties)

13,487.2

12,137.9

Retroactive gas price adjustments

949

74,393

FSU (Former Soviet Union)

   

Net sales (net of customs duties)

411,722

420,320

Volumes in bcm

48.1

59.4

Average price, RUB/mcm (including customs duties)

10,115.9

8,499.9

Russian Federation

   

Net sales (net of VAT)

820,567

794,349

Volumes in bcm

232.4

243.3

Average price, RUB/mcm (net of VAT)

3,530.9

3,264.6

Total sales of gas

   

Net sales (net of VAT and customs duties)

2,985,385

2,971,823

Volumes in bcm

439.9

477.0

     

Net sales of refined products (net of VAT, excise tax and customs duties)

1,619,214

1,351,713

Net electric and heat energy sales (net of VAT)

426,951

375,589

Net sales of crude oil and gas condensate (net of VAT and customs duties)

209,234

210,216

Net gas transportation sales (net of VAT)

172,842

163,265

Other revenues (net of VAT)

176,185

177,359

Total sales (net of VAT, excise tax and customs duties)

5,589,811

5,249,965

Net sales of gas increased by RUB 13,562 million to RUB 2,985,385 million in the year ended December 31, 2014 as compared with the year ended December 31, 2013.

Net sales of gas to Europe and other countries increased by RUB 69,386 million, or 4%, to RUB 1,752,147 million in the year ended December 31, 2014 as compared with the year ended December 31, 2013. The increase in net sales of gas was mainly driven by the increase in average prices in RUB terms (including customs duties) by 11% which was partly offset by the decrease in the volumes of gas sold by 9%, or 14.9 bcm.

Net sales of gas to FSU countries decreased by RUB 8,598 million, or 2%, to RUB 411,722 million in the year ended December 31, 2014 as compared with the year ended December 31, 2013. The change was due to a 19%, or 11.3 bcm decrease in volumes of gas sold which was partly compensated by a 19% increase in average prices in RUB terms (including customs duties) in the year ended December 31, 2014 as compared with the year ended December 31, 2013.

Net sales of gas in the Russian Federation increased in the year ended December 31, 2014 as compared with the year ended December 31, 2013 by RUB 26,218 million, or 3%, to RUB 820,567 million due to 8% increase in the gross average domestic gas prices which was partly offset by the decrease in volumes of gas sold by 4%, or 10.9 bcm, in the year ended December 31, 2014 as compared with the year ended December 31, 2013.

Net sales of refined products increased by RUB 267,501 million, or 20%, to RUB 1,619,214 million in the year ended December 31, 2014 in comparison with the prior year primarily due to an increase in prices and volumes of Gazprom neft Group’s sales to customers in Russian Federation, Europe and other countries.

Net sales of electric and heat energy (net of VAT) increased by RUB 51,362 million, or 14%, to RUB 426,951 million in the year ended December 31, 2014 as compared with the year ended December 31, 2013. Increase is primarily due to inclusion of OAO MIPC in the consolidated financial statements from September 2013.

Operating expenses increased by RUB 342,761 million, or 10%, in the year ended December 31, 2014 to RUB 3,943,669 million as compared with the prior year.

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 as well as restricted cash and cash equivalents under the terms of certain borrowings and other contractual obligations) increased by RUB 537,835 million, or 48%, from RUB 1,112,798 million as of December 31, 2013 to RUB 1,650,633 million as of December 31, 2014. This increase resulted from depreciation of Rouble against US dollar and Euro which was partly offset by an increase in cash and cash equivalents.

More detailed information on the IFRS consolidated financial statements for the year ended December 31, 2014, can be found here.