OREANDA-NEWS. On 8 November 2010 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 30 June 2010.

The table below presents the unaudited consolidated interim condensed statement of comprehensive income prepared in accordance with IFRS for the six months ended 30 June 2010 and 2009. All amounts are presented in millions of Russian Roubles. 

                                                                                                  Six months ended 30 June 2010     2009

Sales (net of excise tax, VAT and customs duties)                                                      1,721,293        1,470,535
Net gain from trading activity                                                                                       7,761               2,351
Operating expenses                                                                                                 (1,151,334)       (1,040,949)
Operating profit                                                                                                          577,720          431,937
Purchase of non-controlling interest in Gazprom neft                                                          –                13,865
Finance income                                                                                                         91,588             240,415
Finance expense                                                                                                      (83,444)            (317,073)
Share of net income of associated undertakings and jointly controlled entities                52,945             15,790
Gains on disposal of available-for-sale financial assets                                                 1,389               2,839
Profit before profit tax                                                                                                 640,198          387,773
Current profit tax expense                                                                                           (99,390)         (88,393)
Deferred profit tax (expense) benefit                                                                             (32,574)          6,380
Profit tax expense                                                                                                     (131,964)         (82,013)
Profit for the period                                                                                                      508,234         305,760


Other comprehensive income     

Gains arising from change in fair value of available-for-sale financial assets, net of tax               174              12,468
Share of other comprehensive income of associated undertakings and jointly controlled entities 726              3,960
Translation differences                                                                                                        (13,315)         5,926
Revaluation of equity interest                                                                                                 –                 9,911
Other comprehensive (loss) income for the period, net of tax                                                  (12,415)        32,265
Total comprehensive income for the period                                                                            495,819       338,025
Profit attributable to:     
owners of Gazprom                                                                                                              494,684       296,243
non-controlling interest                                                                                                            13,550     9,517
                                                                                                                                            508,234    305,760
Total comprehensive income attributable to:     
owners of Gazprom                                                                                                               480,079      330,396
non-controlling interest                                                                                                            15,740       7,629
                                                                                                                                                495,819    338,025


Sales (net of excise tax, VAT and customs duties) increased by RR 250,758 million, or 17%, to RR 1,721,293 million in the six months ended 30 June 2010 compared to the six months ended 30 June 2009. More detailed information on our sales for the six months ended 30 June 2010 and 2009 is presented in the table below.
 
 in millions of RR (unless otherwise stated) Six months ended                                     30 June 2010         2009
Sales of gas   
Europe and other countries
Net sales (net of excise tax and customs duties)                                                        526,438                584,803
Volumes in bcm                                                                                                            77.0                64.5
Average price, RR/mcm (including excise tax and customs duties)                                 8,595.0             11,174.4
FSU
Net sales (net of VAT and customs duties)                                                                   188,152              161,284
Volumes in bcm                                                                                                             31.6                  21.1
Average price, RR/mcm (including customs duties, net of VAT)                                      6,848.2               8,103.6
Russia
Net sales (net of VAT)                                                                                                  343,587              248,215
Volumes in bcm                                                                                                            150.7               142.8
Average price, RR/mcm (net of VAT)                                                                                2,279.5         1,737.8
Total sales of gas
Net sales (net of excise tax, VAT and customs duties)                                                    1,058,177         994,302
Volumes in bcm                                                                                                               259.3         228.4
    
Net sales of refined products (net of excise tax, VAT and customs duties)                           319,125        222,631
Net electric and heat energy sales (net of VAT)                                                                  148,670       99,826
Net sales of crude oil and gas condensate (net of excise tax, VAT and customs duties)       93,520          79,285
Net gas transportation sales (net of VAT)                                                                           45,576        26,797
Other revenues (net of VAT)                                                                                               56,225         47,694
Total sales (net of excise tax, VAT and customs duties)                                                    1,721,293      1,470,535

Net sales of gas increased by RR 63,875 million, or 6%, to RR 1,058,177 million in the six months ended 30 June 2010 compared to the six months ended 30 June 2009. This increase was primarily due to higher volumes of gas sold in all geographical segments, which was partly compensated by the decrease of average realized prices in RR terms (including excise tax and customs duties) for sales in Europe and other countries and FSU.

For the six months ended 30 June 2010 net sales of gas to Europe and other countries decreased by RR 58,365 million, or 10%, to RR 526,438 million compared to the six months ended 30 June 2009. This mainly results from the decrease of average realized prices in RR terms (including excise tax and customs duties) by 23% which was partly compensated by the increase of the volume of gas sold by 19%, or 12.5 bcm.

Net sales of gas to FSU countries increased by RR 26,868 million, or 17%, to RR 188,152 million in the six months ended 30 June 2010 compared to the six months ended 30 June 2009. The increase of sales in this segment is explained by the increase of volumes of gas sold by 50%, or 10.5 bcm, which was compensated by the decrease of the average realized prices in RR terms (including customs duties, net of VAT) by 15%.

Net sales of gas in the domestic market increased by RR 95,372 million, or 38%, to RR 343,587 million in the six months ended 30 June 2010 compared to the six months ended 30 June 2009. This is explained primarily by the increase in the average domestic price for gas set up by the Federal Tariffs Service, which was enhanced by the increase of the volume of gas sold by 6%, or 7.9 bcm.

Net sales of refined products increased by RR 96,494 million, or 43%, to RR 319,125 million in the six months ended 30 June 2010 compared to the six months ended 30 June 2009. The increase was due to the increase of volumes sold and increase of prices for refined products as well as by new acquisitions of Gazprom neft Group.

Net electric and heat energy sales increased by RR 48,844 million, or 49%, to RR 148,670 million in the six months ended 30 June 2010 compared to the six months ended 30 June 2009. The increase in electric and heat energy sales mainly resulted from consolidation of TGC-1 starting from 31 December 2009 after control over that entity was obtained as well as from the increase in sales of electricity and heat volumes by other energy assets of the Group.

In the six months ended 30 June 2010 net sales of crude oil and gas condensate increased by RR 14,235 million, or 18%, to RR 93,520 million compared to the six months ended 30 June 2009. The increase of net sales of crude oil and gas condensate primarily resulted from the Gazprom Neft activities: net sales of crude oil increased by RR 8,340 million, or 12%, to RR 80,835 million in the six months ended 30 June 2010 compared to the six months ended 30 June 2009.

In the six months ended 30 June 2010 net gas transportation sales increased by RR 18,779 million, or 70%, to RR 45,576 million compared to the six months ended 30 June 2009. The increase of net gas transportation sales was primarily due to the increase of volumes of gas transported for independent gas suppliers.

Operating expenses increased by RR 110,385 million, or 11%, to RR 1,151,334 million in the six months ended 30 June 2010 compared to the six months ended 30 June 2009.

Major items whose growth resulted in the increase of the total amount of operating expenses are: exchange rate differences on operating items (change by RR 43,021 million), taxes other than on income (increase by RR 36,926 million), transit of gas, oil and refined products (increase by RR 34,051 million). With that, the cost of purchased oil and gas decreased by RR 79,996 million. The decrease in cost of purchased gas was mainly caused by the decrease in cost of Central Asian gas purchases.

In the six months ended 30 June 2010 our profit for the period attributable to owners of Gazprom totaled RR 494,684 million which is RR 198,441 million, or 67%, higher compared to the six months ended 30 June 2009.

Our net debt balance (defined as the sum of short-term borrowings, including current portion of long-term borrowings, short-term promissory notes payable, long-term borrowings, long-term promissory notes payable and restructured tax liabilities, 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 RR 397,574 million, or 29%, from RR 1,372,307 million as of 31 December 2009 to RR 974,733 million as of 30 June 2010. This can be explained by the decrease of long-term and short-term borrowings which was primarily caused by the effect of deconsolidation of banking subsidiaries of the Group as of 30 June 2010 and the increase of cash and cash equivalents.

More detailed information on the IFRS consolidated interim condensed financial information for the six months ended 30 June 2010 can be found here.