GAZPROM REPORTS ITS 2013 FINANCIAL RESULTS UNDER IFRS

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29.04.2014  OAO Gazprom issued its audited consolidated financial statements prepared in accordance with International Financial Reporting Standards for the year ended December 31, 2013.

The table below presents the audited consolidated statement of comprehensive income prepared in accordance with IFRS for the years ended December 31, 2013 and 2012. All amounts are presented in millions of Russian Rubles.

		Year ended
		December 31,
		2013		2012
Sales		5,249,965		4,766,495
Net gain from trading activity		5,850		2,821
Operating expenses		(3,600,908)		(3,421,847)
(Charge for) reversal of impairment and other provisions, net		(67,698)		3,208
Operating profit		1,587,209		1,350,677
Finance income		129,523		308,489
Finance expense		(284,107)		(247,168)
Share of net income of associated undertakings and joint ventures		56,670		145,192
(Losses) gains on disposal of available-for-sale financial assets		(3,212)		546
Profit before profit tax		1,486,083		1,557,736
Current profit tax expense		(201,872)		(280,070)
Deferred profit tax expense		(118,506)		(25,251)
Profit tax expense		(320,378)		(305,321)
Profit for the year		1,165,705		1,252,415
Other comprehensive income (loss):
Items that will not be reclassified to profit or loss:
Remeasurements of post-employment benefit obligations		55,424		(69,801)
Total items that will not be reclassified to profit or loss		55,424		(69,801)
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		12,578		(17,499)
Share of other comprehensive income of associated undertakings and joint ventures		10,100		1,885
Translation differences		56,847		(34,792)
(Losses) gains from cash flow hedges, net of tax		(2,305)		806
Total items that will be reclassified to profit or loss		77,220		(49,600)
Other comprehensive income (loss) for the year, net of tax		132,644		(119,401)
Total comprehensive income for the year		1,298,349		1,133,014
Profit attributable to:
Owners of OAO Gazprom		1,139,261		1,224,474
Non-controlling interest		26,444		27,941
		1,165,705		1,252,415
Total comprehensive income attributable to:
Owners of OAO Gazprom		1,267,383		1,106,984
Non-controlling interest		30,966		26,030
		1,298,349		1,133,014

Total sales (net of VAT, excise tax and customs duties) increased by RUB 483,470 million, or 10%, to RUB 5,249,965 million in the year ended December 31, 2013 as compared with the prior year. More detailed information on sales for the years ended December 31, 2013 and 2012 is presented in the table below.

In millions of RUB (unless otherwise stated)	Year ended December 31,
		2013	2012
Sales of gas
Europe and other countries
Net sales (net of customs duties)		1,682,761	1,469,455
Volumes in bcm		174.3	151.0
Average price, RUB/mcm (including customs duties)		12,137.9	11,969.8
Retroactive gas price adjustments		74,393	(102,749)
FSU (Former Soviet Union)
Net sales (net of customs duties)		420,320	529,516
Volumes in bcm		59.4	66.1
Average price, RUB/mcm (including customs duties)		8,499.9	9,489.5
Russian Federation
Net sales (net of VAT)		794,349	760,885
Volumes in bcm		243.3	265.3
Average price, RUB/mcm (net of VAT)		3,264.6	2,867.9
Total sales of gas
Net sales (net of VAT and customs duties)		2,971,823	2,657,107
Volumes in bcm		477.0	482.4
Net sales of refined products (net of VAT, excise tax and customs duties)		1,351,713	1,209,215
Net electric and heat energy sales (net of VAT)		375,589	343,509
Net sales of crude oil and gas condensate (net of VAT and customs duties)		210,216	275,560
Net gas transportation sales (net of VAT)		163,265	125,386
Other revenues (net of VAT)		177,359	155,718
Total sales (net of VAT, excise tax and customs duties)		5,249,965	4,766,495

Net sales of gas increased by RUB 314,716 million, or 12%, to RUB 2,971,823 million in the year ended December 31, 2013 as compared with the year ended December 31, 2012.

Net sales of gas to Europe and other countries increased by RUB 213,306 million, or 15%, to RUB 1,682,761 million in the year ended December 31, 2013 as compared with the year ended December 31, 2012. The increase in net sales of gas was mainly driven by an increase in the volumes of gas sold by 15%, or 23.3 bcm, which was reinforced by the increase in average prices in RUB terms (including customs duties) by 1%.

Retroactive gas price adjustments were recognized in the financial statements for the year ended December 31, 2013 as an increase in sales in the amount of  RUB 74,393 million reflecting a decrease in previously accrued liability. For the year ended December 31, 2012 the effect of retroactive gas price adjustments, related to gas deliveries in the years 2010 and 2011, was recognized as a decrease in sales in the amount of RUB 102,749 million.

Net sales of gas to FSU countries decreased by RUB 109,196 million, or 21%, to RUB 420,320 million in the year ended December 31, 2013 as compared with the year ended December 31, 2012. The change was due to a 10% decrease in average prices in RUB terms (including customs duties) and a 10%, or 6.7 bcm, decrease in the volumes of gas sold in the year ended December 31, 2013 as compared with the year ended December 31, 2012.

Net sales of gas in the Russian Federation increased by RUB 33,464 million, or 4%, and amounted RUB 794,349 million in the year ended December 31, 2013 as compared with the prior year mainly due to a 14% increase in the gross average domestic gas prices. This effect was partly offset by 8%, or 22.0 bcm, decrease of gas sold in the year ended December 31, 2013 as compared with the prior year.

Net sales of refined products increased by RUB 142,498 million, or 12%, to RUB 1,351,713 million in the year ended December 31, 2013 as compared with the prior year primarily due to an increase in volumes sold by Gazprom neft Group to customers in Europe and other countries and in the Russian Federation and also due to an increase in prices. The increase in sales of refined products was partially offset by a decrease in sales of crude oil and gas condensate by RUB 65,344 million, or 24%. The decrease in 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 Gazprom  neftekhim Salavat Group’s results in the consolidated financial statements in June 2012.

Net sales of electric and heat energy increased by RUB 32,080 million, or 9%, to RUB 375,589 million in the year ended December 31, 2013 as compared with the prior year mainly due to inclusion of OAO MIPC in the consolidated financial statements from September 2013.

Net sales of gas transportation services increased by RUB 37,879 million, or 30%, to RUB 163,265 million in the year ended December 31, 2013 as compared with the prior year primarily due to an increase in volumes of gas transported for independent suppliers and gas transportation tariffs.

Operating expenses increased by RUB 179,061 million, or 5%, in the year ended December 31, 2013 to RUB 3,600,908 million as compared with the prior year.

Major item in the total amount of operating expenses is «Purchased gas and oil» which decreased by RUB 66,863 million, or 8%. This decrease in cost of purchased gas  mainly relates to the decrease in volumes of gas purchased from third parties in and outside of the Russian Federation. The cost of purchased oil included in the cost of purchased gas and oil decreased by RUB 49,068 million, or 19%, to RUB 215,278 million in the year ended December 31, 2013 as compared with RUB 264,346 million in the year ended December 31, 2012.

 In the year ended December 31, 2013 profit for the year attributable to owners of OAO Gazprom totaled RUB 1,139,261 million, which is RUB 85,213 million, or 7%, lower compared to the year ended December 31, 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 as well as restricted cash and cash equivalents under the terms of certain borrowings and other contractual obligations) increased by RUB 41,584  million, or 4%,  from RUB 1,071,214 million as of December 31, 2012 to RUB 1,112,798 million as of December 31, 2013. This increase resulted from obtaining new long-term borrowings, and depreciation of RUB against USD and EUR that was offset by an increase in cash and cash equivalents.

More detailed information on the IFRS consolidated financial statements for the year ended December 31, 2013, can be found on OAO Gazprom website (www.gazprom.ru).

INFORMATION DIRECTORATE, OAO GAZPROM

www.gazprom.ru

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