Gazprom

Earnings Release • Nov 14, 2013

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RNS Number : 0732T

OAO Gazprom

14 November 2013

RELEASE

14.11.2013

GAZPROM'S FINANCIAL INFORMATION UNDER INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS) FOR THE SIX MONTHS ENDED JUNE 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 six months ended June 30, 2013.

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

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

		## Six months ended
			## June 30,
2013		2012
Sales			2,568,122		2,231,132
Net gain from trading activity			3,764		5,518
Operating expenses			(1,718,884)		(1,606,607)
Operating profit			853,002		630,043
Finance income			38,501		153,715
Finance expense			(162,479)		(182,008)
Share of net income of associated undertakings and joint ventures			12,804		64,028
Gains (losses) on disposal of available-for-sale financial assets			_   16		_     (78)
Profit before profit tax			741,844		665,700
Current profit tax expense			(42,992)		(140,969)
Deferred profit tax (expense) benefit			(105,447)		9,525
Profit tax expense			(148,439)		(131,444)
Profit for the period			593,405		534,256
Other comprehensive income (loss):
Items that will not be reclassified to profit or loss:
Remeasurements of post-employment benefit obligations			75,623		(3,768)
Total items that will not be reclassified to profit or loss			75,623		(3,768)
Items that will be reclassified to profit or loss:
Losses arising from change in fair value of available-for-sale    financial assets, net of tax			(2,588)		(22,019)
Share of other comprehensive income (loss) of associated undertakings and joint ventures			4,138		(5,039)
Translation differences			49,247		9,064
Losses from cash flow hedges, net of tax			(3,981)		(6,040)
Total items that will be reclassified to profit or loss			46,816		(24,034)
Other comprehensive income (loss) for the period, net of tax			122,439		(27,802)
Total comprehensive income for the period			715,844		506,454
Profit attributable to:
owners of OAO Gazprom			582,683		517,397
non-controlling interest			10,722		16,859
			593,405		534,256
Total comprehensive income attributable to:
owners of OAO Gazprom			702,329		488,878
non-controlling interest			13,515		_  17,576
			715,844		506,454

Sales (net of VAT, excise tax and customs duties) increased by RUB 336,990 million, or 15%, to RUB 2,568,122 million in the six months ended June 30, 2013 compared to the six months ended June 30, 2012. More detailed information on our sales for the six months ended June 30, 2013 and 2012 is presented in the table below.

in millions of RUB (unless otherwise stated)	Six months ended June 30,
		2013	2012
Sales of gas
#### Europe and other countries Net sales (net of customs duties)		824,419	731,316
Volumes in bcm		85.5	77.9
Average price, RUB/mcm (including customs duties)		11,953.6	11,657.9
Retroactive gas price adjustments		73,430	(133,186)
#### FSU (Former Soviet Union)
Net sales (net of customs duties)		179,555	256,695
Volumes in bcm		27.4	33.3
Average price, RUB/mcm (including customs duties)		7,897.6	9,137.9
#### Russian Federation
Net sales (net of VAT)		411,013	389,301
Volumes in bcm		133.6	144.3
Average price, RUB/mcm (net of VAT)		3,075.5	2,698.5
#### Total sales of gas
Net sales (net of VAT and customs duties)		1,488,417	1,244,126
Volumes in bcm		246.5	255.5
Net sales of refined products (net of VAT, excise tax and customs duties)		639,643	544,279
Net electric and heat energy sales (net of VAT)		179,566	177,136
Net sales of crude oil and gas condensate (net of VAT and customs duties)		99,789	129,770
Net gas transportation sales (net of VAT)		80,495	60,279
Other revenues (net of VAT)		80,212	75,542
Total sales (net of VAT, excise tax and customs duties)		2,568,122	2,231,132

Net sales of gas increased by RUB 244,291 million, or 20%, to RUB 1,488,417 million in the six months ended June 30, 2013 compared to the six months ended June 30, 2012.

For the six months ended June 30, 2013 net sales of gas to Europe and other countries increased by RUB 93,103 million, or 13%, to RUB 824,419 million compared to the six months

ended June 30, 2012. This change was primarily due to increase in volumes of gas sold by 10%, or

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

Retroactive gas price adjustments were recognized in the consolidated interim condensed financial information for the six months ended June 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 six months ended June 30, 2012 effect of retroactive gas price adjustment, related to gas deliveries in the years 2010 and 2011, amounted to RUB 133,186 million decrease in sales.

Net sales of gas to FSU countries decreased by RUB 77,140 million, or 30%, to RUB 179,555 million in the six months ended June 30, 2013 compared to the six months ended June 30, 2012.

The decrease in sales in this segment is explained by the decrease in volumes of gas sold by 18%, or

5.9 bcm, which was partially reinforced by the decrease in average realized prices in RUB terms (including customs duties) by 14%.

Net sales of gas in the domestic market increased by RUB 21,712 million, or 6%, to RUB 411,013 million in the six months ended June 30, 2013 compared to the six months ended June 30, 2012. This is explained primarily by the increase in the average domestic price for gas by 14%, which was partially compensated by the decrease in volumes of gas sold by 7%, or 10.7 bcm.

Net sales of refined products increased by RUB 95,364 million, or 18%, to RUB 639,643 million in the six months ended June 30, 2013 compared to the six months ended June 30, 2012. 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 29,981 million, or 23%. 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. Moreover, increase in net sales of refined products is related to an increase in volumes sold by Gazprom neft Group to customers in Europe and other countries and increase in prices.

Net electric and heat energy sales increased by RUB 2,430 million, or 1%, to RUB 179,566 million in the six months ended June 30, 2013 compared to the six months ended June 30, 2012.

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

In the six months ended June 30, 2013 net gas transportation sales increased by RUB 20,216 million, or 34%, to RUB 80,495 million compared to the six months ended June 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 112,277 million, or 7%, to RUB 1,718,884 million in the six months ended June 30, 2013 compared to the six months ended June 30, 2012.

Major item in the total amount of operating expenses is «Purchased gas and oil» which increased by RUB 1,717 million, or 0%. Cost of purchased gas, included in «Purchased gas and oil», increased by RUB 12,145 million, or 5%. This increase mainly relates to the growth in prices of gas purchased from third parties inside and outside of the Russian Federation. Cost of purchased oil, included in «Purchased gas and oil», decreased by RUB 10,428 million, or 9%, to RUB 99,595 million in the six months ended June 30, 2013 compared to RUB 110,023 million in the six months ended June 30, 2012.

In the six months ended June 30, 2013 profit for the period attributable to owners of OAO Gazprom totaled RUB 582,683 million which is RUB 65,286 million, or 13%, higher compared to the six months ended June 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 and 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) decreased

by RUB 164,785 million, or 15%, from RUB 1,071,214 million as of December 31, 2012 to

RUB 906,429 million as of June 30, 2013. This decrease resulted from increase in cash and cash equivalents.

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

INFORMATION DIRECTORATE, OAO GAZPROM

www.gazprom.ru

_____________________________________________________________________________________________

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