Russia: Gazprom Gas Sales Rise

Russian gas giant Gazrpom said its 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 same period in 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 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 compared to 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.

In the nine months ended September 30 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.

In the nine months ended September 30 profit for the period attributable to owners of OAO Gazprom totaled RUB 858,773 million 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.

1 Russian ruble = 0.029617 U.S. dollars

Press Release, January 23, 2014