IFRS profit attributable to the shareholders of JSC NOVATEK for the first half of 2020 fell 41 times to RUB 10.884 billion from RUB 450.971 billion a year earlier, the company reported.
Normalized profit attributable to the company's shareholders excluding FX effects amounted to RUB 74.767 billion against RUB 130.026 billion.
Revenue was RUB 328.501 billion against RUB 452.619 billion, normalized EBITDA of the company's subsidiaries totaled RUB 83.038 billion against RUB 134.917 billion.
The spread of the COVID-19 virus in 2020 and the mandated shutdowns by many governments have caused financial and economic stress to the global markets. This negative economic impact has lowered demand for crude oil, natural gas and oil products, which combined with the increase in the supply of crude oil due to the cancellation of the OPEC+ production agreement in the first quarter 2020, resulted in a decline in global hydrocarbon commodity prices, the company notes.
Global economic activity has begun a gradual recovery during the second quarter following the partial removals of restrictions aimed at preventing the epidemic spread, as well as a partial recovery in benchmark crude oil prices following the new OPEC+ production agreement reached and the compliance to the target cuts. Nevertheless, hydrocarbon benchmark prices remain much lower than their pre-crisis levels. In addition, the ongoing volatility in hydrocarbon commodity benchmark prices significantly influences the dynamics of the Russian rouble relative to foreign currencies. As a result, in each quarter 2020, we recognized substantial foreign exchange effects on foreign currency denominated loans by the Group's subsidiaries and joint ventures.
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, the Group continues to achieve strong operating results and implement its main investment projects in accordance with the Group's approved corporate strategy. The Group's management continues to assess the current situation and present macro-economic environment and will take appropriate actions if deemed necessary, the statement emphasizes.
JSC NOVATEK (tax number: 6316031581) is the second largest natural gas producer in the Russian Federation after Gazprom. In 2017, NOVATEK increased gas sales by 0.5% to 65 billion cubic meters. In the first half of 2018, NOVATEK increased production of hydrocarbons by 2.4% year-on-year to 264.3 million barrels of oil equivalent (boe).
IFRS profit of NOVATEK for 2019 attributable to the company's shareholders increased 5.3 times to RUB 865.477 billion from RUB 163.742 billion a year earlier. Total revenues increased by 3.7% to RUB 862.803 billion from RUB 831.758 billion. Normalized EBITDA including share in EBITDA of joint ventures increased by 11% to RUB 461.157 billion from RUB 415.296 billion.
IFRS loss of JSC NOVATEK for the first quarter of 2020 attributable to the company's shareholders amounted to RUB 30.68 billion against a profit of RUB 381.796 billion a year earlier. Excluding the effects of disposal of interests in subsidiaries and joint ventures and the effect of foreign exchange gains (losses), normalized profit attributable to NOVATEK shareholders amounted to RUB 53.547 billion decreasing by 18.5% from RUB 65.73 billion. Sales revenue shrank by 21.2% to RUB 184.562 billion from RUB 234.106 billion. Normalized EBITDA, including the company's share in the EBITDA of joint ventures, decreased by 14.6% to RUB 100.7 billion.
RAS net profit of JSC NOVATEK for the first quarter of 2020 increased by 4.34 times to RUB 125.56 billion from RUB 28.939 billion a year earlier. Revenue decreased 3.8% to RUB 130.351 billion from RUB 135.492 billion. Gross profit increased by 3% to RUB 59.612 billion from RUB 57.814 billion. Pre-tax profit increased 4.78 times to RUB 144.76 billion from RUB 30.276 billion.
