Gazprom leads among world’s major public oil and gas companies by free cash flow and ranks third by EBITDA
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On the threshold of Gazprom’s annual General Shareholders Meeting the Company’s headquarters hosted today Press Conference “Gazprom’s Financial and Economic Policy”. Taking part in the Press Conference were Andrey Kruglov, Deputy Chairman of the Management Committee, Department Head, Elena Vasilieva, Deputy Chairwoman of the Management Committee, Chief Accountant; Department Heads – Elena Karpel and Karen Oganyan; Mikhail Rosseev, Deputy Chief Accountant.
It was pointed out at the Press Conference that for five years Gazprom had been among world’s top public companies by key financial indicators. In 2014 Gazprom ranked first among world’s major public oil and gas companies by free cash flow and third – by EBITDA.
Due to an upward trend in sales revenues and a balanced approach to capital expenditures, the annual free cash flow has been positive for nine years in a row so far. In 2014 it was record high for Gazprom – RUB 654 billion (in 2013 – RUB 345 billion).
Following the 2014 results, EBITDA adjusted for impairment loss amounted to RUB 1.963 trillion (USD 51.7 billion).
Gazprom’s sound financial standing results from the conservative financial strategy pursued by the Company in the negative global market environment and as a response to a drop in oil and gas prices. Its main components are self-financing, careful ranking of investment projects by order of priority and monitoring of their efficiency. The Company closely controls costs at all stages of preparing and implementing the investment projects.
Special attention is given to restraining the prices of vital materials and equipment. In 2014 the savings from price reduction for vital materials and equipment exceeded RUB 20 billion.
A conservative financial policy and a stable operating cash flow allow Gazprom to maintain its debts at a comfortable level. In 2014 the Group’s total debt dropped by more than 13 per cent – to USD 48 billion. Moreover, the Company additionally cut the costs of borrowing through refinancing of high-interest borrowings.
With a view to use its own intra-Group financial resources more efficiently and following the Order by the Russian President and the Russian Government directives, Gazprom set up a single Treasury. Presently a pilot project for uniting the cash flows of 18 Russian subsidiaries of Gazprom has been successfully executed. Later on, the system of centralized management of the Group’s liquidity will embrace financial resourced of all Gazprom’s subsidiaries in Russia and abroad.
Gazprom also goes on with its efforts for attracting finances from debt capital markets. Thus, in November 2014 despite a tangled geopolitical situation Gazprom placed Eurobonds worth USD 700 million. American and British investors remained the key ones. Since the beginning of 2015 Gazprom has completed several deals for attracting finances from international banks.
The Company makes efforts to diversify the international investor pool, inter alia, by means of strengthening its position in the Asia-Pacific region. In 2014 Gazprom’s global depositary receipts were listed in the Singapore Stock Exchange. Presently, the Company is looking into the possibility of being included into the higher quotation list in this exchange and also being listed in the Hong Kong Stock Exchange. In addition, Gazprom intensely develops the cooperation with Asian investors and representatives of the banking community. The Company considers syndicated loans, project financing and bond issues in Asian currencies to be possible means of attracting debt financing in the Asia-Pacific.
The Press Conference also considered other issues related to the current and future financial and economic activities of Gazprom.