Gazprom’s financial information under International Financial Reporting Standards (IFRS) for the three months ended March 31, 2014

Today Gazprom issued its unaudited consolidated interim condensed financial information prepared in accordance with International Accounting Standard 34 “Interim Financial Reporting” (IAS 34) for the three months ended March 31, 2014.

The table below presents the unaudited consolidated interim condensed statement of comprehensive income prepared in accordance with IFRS for the three months ended March 31, 2014 and 2013. All amounts are presented in millions of Russian Rubles. 

Sales (net of excise tax, VAT and customs duties) increased by RUB 97,296 million, or 7%, to RUB 1,558,737 million in the three months ended March 31, 2014 compared to the three months ended March 31, 2013. More detailed information on our sales for the three months ended March 31, 2014 and 2013 is presented in the table below.

Net sales of gas increased by RUB 6,133 million, or 1%, to RUB 909,952 million in the three months ended March 31, 2014 compared to the three months ended March 31, 2013.

For the three months ended March 31, 2014 net sales of gas to Europe and other countries increased by RUB 56,065 million, or 13%, to RUB 484,379 million compared to the three months ended March 31, 2013. This change was primarily due to an increase in average prices in RUB terms (including customs duties) by 10%, which was reinforced by the increase in volumes of gas sold by 3%, or 1.3 bcm.

Retroactive gas price adjustments were recognized in the consolidated interim condensed financial information for the three months ended March 31, 2013 as an increase in sales in the amount of RUB 73,430 million reflecting a decrease in previously accrued liability.

Net sales of gas to FSU countries increased by RUB 4,982 million, or 4%, to RUB 126,759 million in the three months ended March 31, 2014 compared to the three months ended March 31, 2013. The change was due to an increase in average prices in RUB terms (including customs duties) by 5% and a decrease in volumes of gas sold by 10%, or 1.9 bcm.

Net sales of gas in the domestic market increased by RUB 18,516 million, or 7%, to RUB 298,814 million in the three months ended March 31, 2014 compared to the three months ended March 31, 2013. This is primarily explained by the increase in the average domestic price for gas by 14%, which was partially compensated by the decrease in volumes of gas sold by 6%, or 5.8 bcm.

Net sales of refined products increased by RUB 61,480 million, or 19%, to RUB 380,658 million in the three months ended March 31, 2014 compared to the three months ended March 31, 2013 due to an increase in volumes sold by Gazprom neft Group to customers in the Russian Federation as well as by an increase in prices. The increase in net sales of refined products was partially compensated by a decrease in net sales of crude oil and gas condensate by RUB 2,941 million, or 6%.

Net electric and heat energy sales increased by RUB 27,763 million, or 26%, to RUB 134,614 million in the three months ended March 31, 2014 compared to the three months ended March 31, 2013. The increase was mainly driven by inclusion of OAO Moscow Integrated Power Company (OAO MIPC) in the consolidated financial statements from September 2013.

Operating expenses increased by RUB 139,697 million, or 15%, to RUB 1,089,749 million in the three months ended March 31, 2014 compared to the three months ended March 31, 2013.

The major factor leading to an increase in operating expenses was accrual of provision for doubtful trade accounts receivable in the amount of RUB 71,298 million in the three months ended March 31, 2014, which was mainly related to doubtful trade accounts receivable of NAK Naftogaz Ukraine.

In the three months ended March 31, 2014 profit for the period attributable to owners of OAO Gazprom totaled RUB 223,007 million which is RUB 157,658 million, or 41%, lower compared to the three months ended March 31, 2013.

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 and balances of cash and cash equivalents restricted as to withdrawal under the terms of certain borrowings and other contractual obligations) decreased by RUB 142,855 million, or 13%, from RUB 1,112,798 million as of December 31, 2013 to RUB 969,943 million as of March 31, 2014. This decrease resulted from the increase in cash and cash equivalents, which was partially offset by appreciation of U.S. dollar and Euro against Russian Ruble.

More detailed information on the IFRS consolidated interim condensed financial information for the three months ended March 31, 2014 can be found here.