Bloomberg News

Novatek Second-Quarter Net Falls 0.5% on Foreign Exchange Loss

August 13, 2010

OAO Novatek, Russia’s second-largest gas producer, said profit declined 0.5 percent from a year earlier as the ruble weakened against the dollar.

Net income slid to 7.14 billion rubles ($234 million) from 7.18 billion rubles, the Tarko-Sale, Siberia-based said today in a statement. That missed a mean estimate of 7.61 billion rubles from eight analysts surveyed by Bloomberg News.

Sales rose 11 percent to 25.7 billion rubles as gas output and prices gained, the company said. Novatek, which sells all of its natural gas within Russia, said volumes rose 2.7 percent to 7.91 billion cubic meters. Production rose 9.4 percent to 8.28 billion cubic meters in the period.

Russia’s August heat wave may have “a positive impact on the company’s operations, as signaled by strong dynamics in electricity generation,” Lev Snykov and Svetlana Grizan, oil and gas analysts at VTB Capital in Moscow, said in a note today.

Novatek had a foreign exchange loss of about 1.12 billion rubles in the quarter, compared with a gain of 1.18 billion rubles a year earlier, as paying off foreign-denominated debt became more expensive, according to the financial report.

To contact the reporter on this story: Stephen Bierman in Moscow sbierman1@bloomberg.net.

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net.


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