Russia's second largest natural gas producer and largest independent non-state gas company Novatek increased its IFRS net profit by 60% y/y to RUB 110bn (USD 3.1bn) in 2013. Company's revenues in 2013 went up by 41% y/y to RUB 298bn. This exceeded the expectations of analysts surveyed by Prime who forecasted profit at RUB 80bn and revenues at RUB 296bn.
The 60% y/y jump in net profit is to be attributed to sales of stakes in subsidiaries and affiliated companies. Namely, Novatek sold 20% stake in its Yamal Liquefied Natural Gas (LNG) plant to Chinese CNPC for RUB 3.845bn. Novatek also swapped a 51% stake in gas extraction assets SibNefteGaz with Russia's largest oil company Rosneft.
Should that be unaccounted for, adjusted net profit would amount to RUB 79.8bn in 2013 increasing by 28.4% y/y. Adjusted EBITDA in 2013 was RUB 121.8bn up by 28% y/y. The growth in revenues was attributed to a significant increase in gas supplies to end consumers, to geographical diversification of the supplies, and to increase in regulated gas prices.
As of end of 2013, Russia opened the LNG exports to the liquefaction plants of Novatek (Yamal LNG), largest oil producer Ronseft, and country's largest gas producer Gazprom. Previously Gazprom had a monopoly on exports of gas from Russia, both by pipeline and in LNG form. Most of Russia's natural gas is exported through pipelines, with the only LNG plant operated by Gazprom in Sakhalin.
Novatek, controlled by influential businessman Leonid Mikhelson with ties in Kremlin, is the only private company to be allowed to export natural gas. In fall 2013, Novatek announced selling a 20% stake in the Yamal LNG project to China's CNPC. The Yamal LNG project, based on the resources of Yuzhno-Tambeiskoye gas condensate deposit, includes the construction of a port and a plant with an annual capacity of 16.5mn tonnes of LNG.