Gazprom has prepared interm IAS consolidated financial statements

OAO Gazprom has prepared interim IAS consolidated financial statements for the nine months ended 30 September 2001. The company remains one of the few Russian companies to produce IAS statements for the fourth year. The results demonstrate the Group’s stable financial position.

As at 30.09.2001 gross sales for the reporting period of 2001 was RR 443,707 m having increased by 2% against the similar figure for the first nine months of 2000. Gas sales for the first nine months were RR 365,979 m, export gas sales were RR 257,669 m. Similar figures for the first nine months of 2000 were RR 368,572 m and RR 257,024 m, respectively.

Operating costs for the first nine months of 2001 totalled RR 282,746 m or 11% less against the similar figure for the first nine months of 2000.

Gross profit increased by more than 43% and comprised RR 163,380 m (similar figure for first nine months of 2000 was RR 113,954 m).

Stable low gas prices on domestic market continue to constrain sales. The company continues to subsidise domestic customers due to both low gas prices and the slow rate of payments for such supplies. Expected increases in Russian gas prices, whilst welcome, fail to significantly reverse the effective significant erosion of domestic prices by inflation over the last few years.

Last year the Group negotiated further restructuring of its tax liabilities to the federal budget. The gain from discounting of taxes to their fair value totalled RR 20,031 m and is disclosed in the statements of operations as part of net finance costs.

As a result of the above factors, profit before taxation of the Group for the reporting period increased to RR 168,776 m against the similar figure for the first nine months of 2000 (RR 130,442 m).

However, due to significant profit tax charges (including deferred part) net profit of the Group for the first nine months of 2001 amounted to RR 32,349 m (for the first nine months of 2000 net profit totalled RR 38,379 m). In the absence of a significant decline in inflation, relatively high deferred tax charges will continue to accrue on its underlying asset base.

It should be highlighted that net profit of the company for the 3 months ended 30 September 2001 was RR 22,266 or RR 9,092 m higher than for the same quarter of 2000.

Information Directorate, OAO Gazprom