PAO NOVATEK has released its consolidated interim condensed financial statements as of and for the three and six months ended 30 June 2018.

In the second quarter of 2018, total revenues amounted to RR 195.8 billion and EBITDA, including our share in EBITDA of joint ventures, totaled RR 101.3 billion, representing increases of 52.0% and 80.7%, respectively, as compared to the corresponding period in 2017. Total revenues and Normalized EBITDA, including the company's share in EBITDA of joint ventures, during the six months ended 30 June 2018 amounted to RR 375.2 billion and RR 177.6 billion, representing increases of 32.4% and 43.0%, respectively, as compared to the corresponding period in 2017. The increases in total revenues and Normalized EBITDA were largely due to the production launch of the first LNG train at Yamal LNG at the end of 2017, as well as an increase in average realized liquids and natural gas prices.

In the second quarter and the first half of 2018, profit attributable to shareholders of PAO NOVATEK increased to RR 32.0 billion (RR 10.63 per share), or by approximately ten-fold, and to RR 75.2 billion (RR 24.93 per share), or by 1.2%, respectively, as compared to the corresponding periods in 2017. The profit in the reporting periods was significantly impacted by the recognition of substantial non-cash foreign exchange effects on foreign currency denominated loans of the Group and its joint ventures. Excluding the effect of foreign exchange differences, as well as the one-time effect from the disposal of interests in joint ventures, Normalized profit attributable to shareholders of PAO NOVATEK totaled RR 54.3 billion (RR 18.01 per share) in the second quarter of 2018 and RR 101.2 billion (RR 33.57 per share) in the first half of 2018, representing increases of 60.8% and 29.5%, respectively, as compared to the corresponding periods in 2017. 

NOVATEK's operational results for the second quarter and the first half of 2018 were significantly impacted by the production launch of the first LNG train at Yamal LNG at the end of 2017, as well as the acquisitions of new producing fields at the end of 2017 and in the first quarter of 2018 (the Beregovoye, the West-Yaroyakhinskoye and the Syskonsyninskoye fields). As a result, total natural gas production for the second quarter and the first half of 2018 increased by 4.2% and 3.2%, respectively, and total liquids production changed insignificantly (increased by 0.3% and decreased 0.4%, respectively).

In the second quarter and the first half of 2018, natural gas sales volumes totaled 15.1 billion and 35.4 billion cubic meters (bcm), representing increases of 5.3% and 6.9%, respectively, as compared to the corresponding periods in 2017, due to the commencement of sales of LNG purchased from our joint venture Yamal LNG to international markets from December 2017 and an increase in volumes sold in the Russian Federation. As at the end of the second quarter of 2018, cumulative natural gas inventory balances mainly in the Underground Gas Storage Facilities, the Gas Transmission System and own pipeline infrastructure totaled 1.3 bcm as compared to 0.6 bcm at the end of the second quarter of 2017.

In the second quarter of 2018, liquid hydrocarbons sales volumes amounted to 4.3 million tons, representing a 4.9% increase compared to the second quarter of 2017 mainly from the sale of stable gas condensate refined products in transit at the end of the first quarter of 2018. In the first half of 2018, liquid hydrocarbon sales volumes totaled 8.1 million tons, representing a marginal decrease by 1.6% compared to the corresponding prior year period. As at 30 June 2018, NOVATEK recorded 806 mt of liquid hydrocarbons in transit or storage and recognized as inventory as compared to 699 mt at 30 June 2017.