OAO Novatek, Russia's second-largest natural-gas producer, said profit in 2005 more than doubled after the company increased output of the fuel.
Net income jumped to 13.7 billion rubles ($498 million), or 4,511 rubles a share, from 5.69 billion rubles, or 2,510 rubles a share, a year earlier, Novatek said today in an e-mailed statement. Revenue surged 71 percent to 42.19 billion rubles under International Financial Reporting Standards, the company said.
Moscow-based Novatek raised natural-gas output last year 23 percent to 25.2 billion cubic meters, the equivalent of the amount consumed in Spain. Russia has the world's largest gas reserves and state-run OAO Gazprom is the biggest producer of the fuel.
``The record financial performance in 2005 was attributable to increases in production volumes from core fields, a favorable pricing environment, asset consolidations and net gain on disposable asset sales,'' Novatek said in the statement.
Novatek's fourth-quarter net profit amounted to $115 million, according to Bloomberg calculations. That's below the median estimate of $117 million in a Bloomberg survey of eight analysts. The company didn't break down its quarterly results.
Novatek increased natural-gas sales 76 percent to 22.7 billion rubles last year. Sales of liquid fuels, which include crude oil, gas condensate, liquefied petroleum gas and oil products, jumped 80 percent to 14.5 billion rubles.
Capital expenditure last year was about 6.5 billion rubles, the company said, without giving a figure for 2004. The company reduced long-term debt by 93 percent to 892 million rubles.
``During 2005, we significantly strengthened our balance sheet by retiring a large portion of our existing debt, which resulted in a lower average borrowing cost,'' Chief Financial Officer Mark Gyetvay said in the statement.
Gazprom produces about 85 percent of the natural gas in Russia. Gazprom controls the national pipeline network and is the country's only exporter of the fuel. The government caps domestic gas prices to subsidize industrial producers and households, and to fight inflation.
Novatek's shares traded in London fell 1 percent to $41.59. The shares dropped as much as 3 percent before the announcement.
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