9-month IFRS profit attributable to shareholders of NOVATEK plummeted 34 times year-on-year to RUB 24.056 billion, the company reported.
Revenue from sales of oil and gas amounted to RUB 484.447 billion decreasing by 24%, total revenue reached RUB 492.272 billion (-23.3%). Normalized EBITDA including share in EBITDA of joint ventures was RUB 265.821 billion (-21%). Normalized profit attributable to the shareholders, which is the basis for calculating dividends, decreased by 38% to RUB 110.487 billion.
The Group's financial results in 2020 were significantly impacted by a weak macroeconomic environment noted above that resulted in a decrease in the company's hydrocarbon sales prices and a recognition of substantial FX effects. The financial results were also impacted by the disposal of a 40% stake in Arctic LNG 2 in 2019.
In 3Q2020, net profit of NOVATEK decreased 28 times year-on-year to RUB 13.172 billion, normalized profit was RUB 35.72 billion (-26.4%). The company's total revenues and normalized EBITDA, including its share in EBITDA of joint ventures, amounted to RUB 163.8 billion and RUB 93.9 billion, respectively, representing a reduction of 13.4% and 10.2%, respectively.
"The decreases in total revenues and Normalized EBITDA were largely due to a decline in global benchmark prices for hydrocarbons. Our revenues also decreased due to a reduction in LNG sales volumes on international markets resulted from an increase in the share of our joint venture OAO Yamal LNG direct sales under long-term contracts and a corresponding decrease in our spot LNG volumes purchased from Yamal LNG," NOVATEK notes.
Besides, the company's free cash flow turned positive in the third quarter after falling below zero in the second quarter of 2020. In the reporting period, FCF amounted to RUB 9.52 billion (-46.4% year-on-year).
JSC NOVATEK is the largest independent natural gas producer in Russia, and in 2017, entered the global LNG market by successfully launching the Yamal LNG project. Founded in 1994, the company is engaged in the exploration, production, processing and marketing of natural gas and liquid hydrocarbons. Upstream activities of the company's subsidiaries and joint ventures are concentrated mainly in the prolific Yamal-Nenets autonomous area, which is the world's largest natural gas producing area and accounts for approximately 80% of Russia's natural gas production and approximately 15% of the world's gas production. The company's shares are listed in Russia on Moscow Exchange (MOEX) and the London Stock Exchange (LSE) under the NVTK ticker symbol.
