Gazprom

Earnings Release • Jan 23, 2014

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RNS Number : 3334Y

OAO Gazprom

23 January 2014

RELEASE

23.01.2014

GAZPROM'S FINANCIAL INFORMATION UNDER INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS) FOR THE NINE MONTHS

ENDED SEPTEMBER 30, 2013

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 nine months ended September 30, 2013.

The table below presents the unaudited consolidated interim condensed statement of comprehensive income prepared in accordance with IFRS for the nine months ended

September 30, 2013 and 2012.  All amounts are presented in millions of Russian Rubles.

		## Nine months ended
			## September 30,
2013		2012
Sales			3,772,668		3,352,788
Net gain from trading activity			7,073		5,798
Operating expenses			(2,596,841)		(2,464,208)
Operating profit			1,182,900		894,378
Finance income			88,019		253,286
Finance expense			(209,834)		(204,567)
Share of net income of associated undertakings and joint ventures			35,799		113,522
Gains (losses) on disposal of available-for-sale financial assets			92		(35)
Profit before profit tax			1,096,976		1,056,584
Current profit tax expense			(112,669)		(211,997)
Deferred profit tax (expense) benefit			(107,976)		2,005
Profit tax expense			(220,645)		(209,992)
Profit for the period			876,331		846,592
Other comprehensive income (loss):
Items that will not be reclassified to profit or loss:
Remeasurements of post-employment benefit obligations			61,490		(6,025)
Total items that will not be reclassified to profit or loss			61,490		(6,025)
Items that will be reclassified to profit or loss:
Gains (losses) arising from change in fair value of available-for-sale    financial assets, net of tax			9,027		(13,424)
Share of other comprehensive income (loss) of associated undertakings and joint ventures			7,785		(8,919)
Translation differences			47,630		(22,330)
Losses from cash flow hedges, net of tax			(3,059)		(2,518)
Total items that will be reclassified to profit or loss			61,383		(47,191)
Other comprehensive income (loss) for the period, net of tax			122,873		(53,216)
Total comprehensive income for the period			999,204		793,376
Profit attributable to:
Owners of OAO Gazprom			858,773		827,188
Non-controlling interest			17,558		19,404
			876,331		846,592
Total comprehensive income attributable to:
Owners of OAO Gazprom			978,691		775,023
Non-controlling interest			20,513		_  18,353
			999,204		793,376

Sales (net of VAT, excise tax and customs duties) increased by RUB 419,880 million, or 13%, to RUB 3,772,668 million in the nine months ended September 30, 2013 compared to the nine months ended September 30, 2012. More detailed information on our sales for the nine months ended September 30, 2013 and 2012 is presented in the table below.

in millions of RUB (unless otherwise stated)	Nine months ended September 30,
		2013	2012
Sales of gas
#### Europe and other countries Net sales (net of customs duties)		1,224,315	1,068,815
Volumes in bcm		126.8	111.4
Average price, RUB/mcm (including customs duties)		12,114.8	11,781.1
Retroactive gas price adjustments		73,430	(133,186)
#### FSU (Former Soviet Union)
Net sales (net of customs duties)		289,715	385,644
Volumes in bcm		42.2	47.9
Average price, RUB/mcm (including customs duties)		8,301.7	9,531.0
#### Russian Federation
Net sales (net of VAT)		536,925	508,260
Volumes in bcm		170.8	183.3
Average price, RUB/mcm (net of VAT)		3,143.0	2,772.8
#### Total sales of gas
Net sales (net of VAT and customs duties)		2,124,385	1,829,533
Volumes in bcm		339.8	342.6
Net sales of refined products (net of VAT, excise tax and customs duties)		1,002,091	874,373
Net electric and heat energy sales (net of VAT)		250,972	243,745
Net sales of crude oil and gas condensate (net of VAT and customs duties)		155,429	200,416
Net gas transportation sales (net of VAT)		120,727	90,314
Other revenues (net of VAT)		119,064	114,407
Total sales (net of VAT, excise tax and customs duties)		3,772,668	3,352,788

Net sales of gas increased by RUB 294,852 million, or 16%, to RUB 2,124,385 million in the nine months ended September 30, 2013 compared to the nine months ended September 30, 2012.

For the nine months ended September 30, 2013 net sales of gas to Europe and other countries increased by RUB 155,500 million, or 15%, to RUB 1,224,315 million compared to the nine months

ended September 30, 2012. This change was primarily due to increase in volumes of gas sold by 14%, or

15.4 bcm, which was reinforced by the increase in average prices in RUB terms (including customs duties) by 3%.

Retroactive gas price adjustments were recognized in the consolidated interim condensed financial information for the nine months ended September 30, 2013 as an increase in sales in the amount of RUB 73,430 million reflecting a decrease in previously accrued liability. In the consolidated interim condensed financial information for the nine months ended September 30, 2012 effect of retroactive gas price adjustments, related to gas deliveries in the years 2010 and 2011, were recognized as a decrease in sales in the amount of RUB 133,186 million.

Net sales of gas to FSU countries decreased by RUB 95,929 million, or 25%, to RUB 289,715 million in the nine months ended September 30, 2013 compared to the nine months ended September 30, 2012.

The change was due to a decrease in average prices in RUB terms (including customs duties) by 13% and a decrease in volumes of gas sold by 12%, or 5.7 bcm.

Net sales of gas in the domestic market increased by RUB 28,665 million, or 6%, to RUB 536,925 million in the nine months ended September 30, 2013 compared to the nine months ended September 30, 2012. This is primarily explained by the increase in the average domestic price for gas by 13%, which was partially compensated by the decrease in volumes of gas sold by 7%, or 12.5 bcm.

Net sales of refined products increased by RUB 127,718 million, or 15%, to RUB 1,002,091 million in the nine months ended September 30, 2013 compared to the nine months ended September 30, 2012 due to an increase in volumes sold by Gazprom neft Group to customers in Europe and other countries as well as 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 44,987 million, or 22%. The decrease in net sales of crude oil was caused by a decrease in volumes of crude oil sold to customers in Europe and other countries. Reallocation of sales between operating segments is related to inclusion of OAO Gazprom neftekhim Salavat's results in consolidated interim condensed financial information in June 2012.

Net electric and heat energy sales increased by RUB 7,227 million, or 3%, to RUB 250,972 million in the nine months ended September 30, 2013 compared to the nine months ended September 30, 2012.

The increase is mainly caused by the increase in sales of energy sector companies.

In the nine months ended September 30, 2013 net gas transportation sales increased by RUB 30,413 million, or 34%, to RUB 120,727 million compared to the nine months ended September 30, 2012. The increase in net gas transportation sales was primarily due to an increase in volumes of gas transportation services rendered to independent gas suppliers and an increase in gas transportation tariffs.

Operating expenses increased by RUB 132,633 million, or 5%, to RUB 2,596,841 million in the nine months ended September 30, 2013 compared to the nine months ended September 30, 2012.

Major item in the total amount of operating expenses is "Purchased gas and oil" which decreased by RUB 40,639 million, or 7%. Decrease in cost of purchased gas mainly resulted from decrease in volumes of gas purchased from third parties in and outside of the Russian Federation. Cost of purchased oil, included in "Purchased gas and oil", decreased by RUB 35,955 million, or 19%, to RUB 156,083 million in the nine months ended September 30, 2013 compared to RUB 192,038 million in the nine months ended September 30, 2012.

In the nine months ended September 30, 2013 profit for the period attributable to owners of OAO Gazprom totaled RUB 858,773million which is RUB 31,585 million, or 4%, higher compared to the nine months ended September 30, 2012.

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) increased

by RUB 86,528 million, or 8%, from RUB 1,071,214 million as of December 31, 2012 to

RUB 1,157,742 million as of September 30, 2013. This increase resulted from obtaining new long-term and short-term borrowings, depreciation of RUB against USD and EUR that was partially offset by increase in cash and cash equivalents.

More detailed information on the IFRS consolidated interim condensed financial information for the nine months ended September 30, 2013 can be found on OAO Gazprom web site (www.gazprom.ru).

INFORMATION DIRECTORATE, OAO GAZPROM

www.gazprom.ru

_____________________________________________________________________________________________

Media                                                                       Investment Community

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pr@gazprom.ru                                                          ir@gazprom.ru

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