OREANDA-NEWS. On November 9, 2011, 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, 2011.

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, 2011 and 2010. All amounts are presented in millions of Russian Rubles. Six months ended June 30
2011 2010
Sales 2,347,071 1,716,279
Net (loss) gain from trading activity (236) 2,437
Operating expenses (1,498,340) (1,140,996)
Operating profit 848,495 577,720
Finance income 106,765 91,588
Finance expense (44,675) (83,444)
Share of net income of associated undertakings and jointly controlled entities 62,566 52,945
Gains on disposal of available-for-sale financial assets 831 1,389
Profit before profit tax 973,982 640,198
Current profit tax expense (170,346) (99,390)
Deferred profit tax expense (18,434) (32,574)
Profit tax expense (188,780) (131,964)
Profit for the period 785,202 508,234
Other comprehensive income
(Losses) gains arising from change in fair value of available-for-sale financial assets, net of tax (2,389) 174
Share of other comprehensive (loss) income of associated undertakings and jointly controlled entities (6,352) 726
Translation differences (25,034) (13,315)
Other comprehensive loss for the period, net of tax (33,775) (12,415)
Total comprehensive income for the period 751,427 495,819
Profit attributable to:
owners of Gazprom 771,669 494,684
non-controlling interest 13,533 13,550
785,202 508,234
Total comprehensive income attributable to:
owners of Gazprom 739,777 480,079
non-controlling interest 11,650 15,740
751,427 495,819

Sales (net of excise tax, VAT and customs duties) increased by RUB 630,792 million, or 37%, to RUB 2,347,071 million in the six months ended June 30, 2011 compared to the six months ended June 30, 2010. More detailed information on our sales for the six months ended June 30, 2011 and 2010 is presented in the table below. in millions of RUB (unless otherwise stated)
Six months ended June 30 2011 2010
Sales of gas
Europe and other countries
Net sales (net of excise tax and customs duties) 742,212 524,361
Volumes in bcm 86.6 76.3
Average price, RUB/mcm (including excise tax and customs duties) 10,356.0 8,646.0
FSU
Net sales (net of VAT and customs duties) 331,434 188,152
Volumes in bcm 46.8 31.6
Average price, RUB/mcm (including customs duties, net of VAT) 7,630.5 6,848.2
Russia
Net sales (net of VAT) 398,630 343,587
Volumes in bcm 154.2 150.7
Average price, RUB/mcm (net of VAT) 2,585.6 2,279.5
Total sales of gas
Net sales (net of excise tax, VAT and customs duties) 1,472,276 1,056,100
Volumes in bcm 287.6 258.6
Net sales of refined products (net of excise tax, VAT and customs duties) 451,938 319,125
Net electric and heat energy sales (net of VAT) 180,215 145,733
Net sales of crude oil and gas condensate (net of excise tax, VAT and customs duties) 117,293 93,520
Net gas transportation sales (net of VAT) 55,500 45,576
Other revenues (net of VAT) 69,849 56,225
Total sales (net of excise tax, VAT and customs duties) 2,347,071 1,716,279


Net sales of gas increased by RUB 416,176 million, or 39%, to RUB 1,472,276 million in the six months ended June 30, 2011 compared to the six months ended June 30, 2010. This increase was primarily due to higher volumes of gas sold in Russia, FSU, Europe and other countries which was enhanced by the increase of average realized prices in RUB terms (including excise tax and customs duties) for sales in all geographical segments.

For the six months ended June 30, 2011 net sales of gas to Europe and other countries increased by RUB 217,851 million, or 42%, to RUB 742,212 million compared to the six months ended June 30, 2010. This mainly results from the increase of average realized prices in RUB terms (including excise tax and customs duties) by 20% which was enhanced by the increase of the volume of gas sold by 13%, or 10.3 bcm.

Net sales of gas to FSU countries increased by RUB 143,282 million, or 76%, to RUB 331,434 million in the six months ended June 30, 2011 compared to the six months ended June 30, 2010. The increase of sales in this segment is explained by the increase of volumes of gas sold by 48%, or 15.2 bcm, which was enhanced by the increase of the average realized prices in RUB terms (including customs duties, net of VAT) by 11%.

Net sales of gas in the domestic market increased by RUB 55,043 million, or 16%, to RUB 398,630 million in the six months ended June 30, 2011 compared to the six months ended June 30, 2010. This is explained primarily by the increase in the average domestic price for gas set up by the Federal Tariffs Service.

Net sales of refined products increased by RUB 132,813 million, or 42%, to RUB 451,938 million in the six months ended June 30, 2011 compared to the six months ended June 30, 2010. The increase was due to the increase of prices for refined products and increase of volumes sold.

Net electric and heat energy sales increased by RUB 34,482 million, or 24%, to RUB 180,215 million in the six months ended June 30, 2011 compared to the six months ended June 30, 2010. The increase in electric and heat energy sales is explained by the increase in the tariffs for electric and heat energy and by the increase in volumes.

In the six months ended June 30, 2011 net sales of crude oil and gas condensate increased by RUB 23,773 million, or 25%, to RUB 117,293 million compared to the six months ended June 30, 2010. The increase in net sales of crude oil and gas condensate primarily resulted from the Gazprom neft activities: net sales of crude oil increased by RUB 15,393 million, or 19%, to RUB 96,228 million in the six months ended June 30, 2011 compared to the six months ended June 30, 2010. The increase of gas condensate sales was primarily due to the increase in the average realized prices and volumes of gas condensate sold.

In the six months ended June 30, 2011 net gas transportation sales increased by RUB 9,924 million, or 22%, to RUB 55,500 million compared to the six months ended June 30, 2010. The increase in net gas transportation sales was primarily due to the increase in the tariffs for transportation of gas for independent gas suppliers, and due to the increase in volumes of gas transported for independent gas suppliers.

Operating expenses increased by RUB 357,344 million, or 31%, to RUB 1,498,340 million in the six months ended June 30, 2011 compared to the six months ended June 30, 2010.

Major item in the total amount of operating expenses is "Purchased gas and oil" which increased by RUB 178,403 million. The increase in cost of purchased gas relates to the increase in volumes and increase in prices of gas purchased from third parties within Russian Federation and abroad.

In the six months ended June 30, 2011 our profit for the period attributable to owners of Gazprom totaled RUB 771,669 million which is RUB 276,985 million, or 56%, higher compared to the six months ended June 30, 2010.

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 RUB 59,384 million, or 7%, from RUB 870,993 million as of December 31, 2010 to RUB 811,609 million as of June 30, 2011. This can be explained by the decrease in long-term borrowings mainly due to appreciation of RUB against USD.