Naftogaz releases its unaudited consolidated financial statements for the six months ended 30 June 2017. The document is available here.

The group achieved a net profit of UAH 23.3 billion in the first half of 2017, UAH 4 billion more than in the first half of 2016. The main factors that contributed to the higher net result are the government's policy of linking regulated gas price for households to import parity prices and the increased volumes of gas transit across Ukraine.

Profitable segments:

· gas upstream showed a net profit of UAH 18.1 billion compared (UAH 4.6 billion in the first half of 2016).

· gas transmission and distribution segment generated a net profit of UAH 15.5 billion, 33% more than in the first half 2016, due to increased volumes of gas transit and devaluation of the hryvnia against US dollar.

The group’s other profitable segments in the first half 2017 were crude oil and gas condensate upstream, refinery and oil transportation.

Loss-making segments:

· the group suffered a loss of UAH 3.8 billion from gas trading and supply segment. In particular, loss from gas sales under public service obligations (PSO) amounted to UAH 6.9 billion. Gas sales on unregulated commercial terms generated UAH 0.3 billion profits, excluding the effect of elimination of intersegment profits from gas sales to other segments in the amount of UAH 2.8 billion.

· gas storage segment generated a loss of UAH 1 billion, 8.1% higher compared to the fsame period of 2016.

Subsidies

In the first half of 2017, UAH 29.5 billion of gas supplied by Naftogaz was covered by subsidies provided by the state to vulnerable consumers. As at 1 July 2017, UAH 19.1 billion remained to be financed by the state.

Taxes
During the first half 2017 Naftogaz group transferred to the state budget UAH 56.7 billion of taxes, 49% more than in the same period of 2016. VAT accounted for approximately a half of this amount. Subsoil royalties for gas, oil and gas condensate amounted to 33% of total taxes paid.

In addition, in the first half of 2017 Naftogaz group paid UAH 13.3 billion in dividends and UAH 2.4 billion of respective income tax prepayment to the state budget.

In total, the amount of dividends and taxes paid by Naftogaz group to the state budget in the first half 2017 exceeded UAH 72.4 billion.

Please click here to read the analytical summary on the group’s results for the first half of 2017.