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Novatek´s Q2 net profit declined by nearly 40% year on year to $573 million

Novatek´s Q2 net profit declined by nearly 40% year on year to $573 million

Moscow, July 29 - Neftegaz.RU. It was undoubtedly the most dramatic quarter in the history of the oil&gas markets. In just a few months, the coronavirus pandemic has reduced so much oil, gas and fuel demand what financial crashes, recessions and wars had failed to ever do. The world’s largest oil-field services company Schlumberger is cutting about 21,000 jobs, energy giant BP has announced plans to cut 10,000 jobs.

One of the world’s top LNG companies, Russian Novatek, reported today that these exogenous events are outside of the Group’s management control, and their scale and duration are difficult to assess. Despite the economic instability on the global markets, Novatek said tjhat it continues to achieve strong operating results and implement its main investment projects in accordance with the corporate strategy.

Novatek today reported results for the Q2 of 2020. The company´s total revenues and Normalized EBITDA amounted to RUB 143.9 billion and RUB 71.3 billion, respectively, representing decreases of 34.1% and 38.5% as compared to the Q2 2019.

The company explained decreases in total revenues and Normalized EBITDA largely due to a decline in global benchmark prices for hydrocarbons.

The company´s revenues also decreased due to a reduction in LNG sales volumes on international markets resulted from an increase in the share of its joint venture Yamal LNG direct sales under long-term contracts and a corresponding decrease in our spot LNG volumes purchased from Yamal LNG.

In the Q2 2020, Novatek´s total revenues and Normalized EBITDA amounted to RUB 143.9 billion and RUB 71.3 billion, respectively, representing decreases of 34.1% and 38.5% as compared to the Q2 2019.

Novatek´s total natural gas production including its proportionate share in the production of joint ventures decreased by 2.2% in the Q2 2020 compared to 2019.

The decrease in production at mature fields of Novatek´s subsidiaries and joint ventures was almost offset by the launch of the North-Russkoye field at the end of 2019 and an increase in hydrocarbon production from the Achimov horizons at Arcticgas’s Urengoyskoye field due to the expansion of the gas condensate treatment facility in January 2020.

In the Q2 2020, the company´s natural gas sales volumes totaled 16.9 bcm, representing decrease of 9.9%  as compared to the corresponding periods in 2019.

To read the news in Russian.