By October 26, 2016 Read More →

Novatek swings to third-quarter profit


Novatek is owned by Leonid Mikhelson and Gennady Timchenko.  Timchenko is a friend of Russian President Vladimir Putin.  Novatek photo.

Novatek Q3 sales up 8 per cent

MOSCOW, Oct 26 (Reuters) – Novatek highlighted its status as one of Russia’s fastest-growing oil and gas producers by posting a hefty third-quarter swing to profit on rising sales as new fields came onstream.

Despite Western sanctions over Moscow’s role in the Ukrainian crisis, Russia’s second-largest gas producer has ramped up output thanks to new deposits such as the Yarudeiskoye oil field, with results showing marked improvements since weakness in the Russian currency sent it to a 13.4 billion rouble ($215 million) loss in last year’s third quarter.

Net profit for the three months to Sept. 30 reached 36.5 billion roubles, it said on Wednesday, slightly short of the consensus forecast in a Reuters poll of analysts.

Third-quarter sales were up 8 per cent at 126.5 billion roubles, narrowly beating the 125.5 billion rouble forecast, the company said.

Cashflow, meanwhile, jumped to 35.7 billion roubles from 4.6 billion roubles, its highest ever third-quarter showing.

Novatek, owned by its CEO Leonid Mikhelson and businessman Gennady Timchenko, a friend of Russian President Vladimir Putin, plans to keep natural gas production flat this year while targeting a 30 per cent rise in output of crude oil and gas condensate. For 2017, it expects a small decline in gas output.

Shares in the company, which is due to present its updated strategy before the end of the year, rose 0.7 per cent by 1015 GMT, outperforming a 0.1 per cent decline for the broader Moscow stock market.

Together with its partners, including French energy giant Total, Novatek has been implementing its $27 billion Yamal liquefied natural gas (LNG) project, aided by more than $15 billion in loan agreements with Russian and Chinese banks.

(Reporting by Vladimir Soldatkin; Editing by David Goodman)

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