Naftogaz Ukrainy, following the results of its activities from providing natural gas transit services in January-March 2020, received a positive EBITDA (profit before interest, taxes and depreciation) of UAH 372 million, according to consolidated unaudited statements published on the company’s website.
At the same time, the net income of the company from transit services in January-March 2020 amounted to UAH 10.382 billion.
In turn, according to the report of Gas Transmission System Operator of Ukraine LLC (GTSOU) for the first quarter of 2020, its net income amounted to UAH 14.715 billion (includes not only transit revenues, but also those from provision of internal transportation services).
As reported, the transit contract concluded in 2009 between Naftogaz Ukrainy and Gazprom expired on the morning of January 1, 2020. A new agreement between the companies on the organization of transportation, a transport agreement between Naftogaz and GTSOU, as well as an inter-operator agreement between GTSOU and Gazprom were signed on December 30, 2019.
In June 2020, NJSC Naftogaz Ukrainy will reduce the price of natural gas sold to industrial consumers on an advance payment basis by 20.7% (UAH 849.60) compared to the current month’s price, to UAH 3,256 per 1,000 cubic meters (including VAT).
According to a report on the company’s website, the indicated price is relevant for consumers purchasing gas on an advance payment in the amount of more than 50,000 cubic meters per month, provided that there are no debts to the company and for 100% subsidiaries of Naftogaz Ukrainy.
For other buyers, the price next month will decrease by 19% (by UAH 896.40), to UAH 3,818 per 1,000 cubic meters (including VAT).
Anti-trust agency opens case against Naftogaz for setting prices for households too high
The Antimonopoly Committee of Ukraine (AMC) has opened a case about the possible abuse of monopoly position by Naftogaz Ukrainy when setting natural gas prices for the population from November 1, 2018, the committee’s website reports.
The AMC reported that Naftogaz has special obligations to sell gas to domestic consumers (the public). At the same time, the company sets prices in this market segment based on the price of gas for industry, which it offers.
According to information available to the committee, Naftogaz set prices for industrial consumers higher than those established in a competitive environment, in particular, according to the results of electronic exchange trading on the Ukrainian Energy Exchange and on European hubs with the condition of gas delivery to the Ukrainian border (NCG).
“This may indicate the establishment by Naftogaz Ukrainy from November 1, 2018 of prices for natural gas for the population at a level that could not be established if there was significant competition in the natural gas markets,” the statement said.
Ukrainian President Volodymyr Zelensky has proposed that $2.9 billion, which NJSC Naftogaz Ukrainy received from Russia’s Gazprom as the execution of the award of the Arbitration Institute of the Stockholm Chamber of Commerce, are sent for the implementation of infrastructure projects and healthcare development.
“We plan to additionally provide funds for road construction. This is our infrastructure priority, other infrastructure projects, the medical sector and energy efficiency. Among the plans is to build more than 200 medical aid stations across Ukraine,” he said at a meeting with representatives of the Cabinet ministers and the Verkhovna Rada on Tuesday, the press service of the head of state reported.
Zelensky invited the government to prepare the necessary draft documents within two weeks.
Oschadbank and NJSC Naftogaz Ukrainy have approved the extension of the term of the loan agreement, the debt on which is UAH 1.97 billion to December 24, 2024, while the loan agreement was to expire on June 9, 2020, according to an explanatory note to the draft government resolution available at Interfax-Ukraine.
The Cabinet of Ministers, which had previously provided government guarantees for this loan, agreed on such a prolongation at a meeting held on Wednesday, MP Oleksiy Honcharenko said in his Telegram channel.
According to the Naftogaz report, as of September 30, 2019, about 98% of its cash and balances in bank accounts, the total amount of which amounted to UAH 24.96 billion, were placed in state-controlled banks. At the same time, these banks accounted for approximately 59% of Naftogaz’s loans with a total volume of UAH 60.79 billion the company has.
At the end of 2018, these indicators amounted to 96% of UAH 14.22 billion and 76% of UAH 56 billion, respectively.
The amount of provided government guarantees for Naftogaz’s obligations for January-September last year decreased from UAH 15.44 billion to UAH 2.91 billion.
Naftogaz Ukrainy Group in January-September 2019 increased its consolidated net profit by 27.4% (UAH 4.578 billion) compared to the same period in 2018, to UAH 21.309 billion. “Pretax profit in the nine months of 2019 amounted to UAH 28.9 billion, which is 26% more than for the same period last year. This result occurred mainly due to the performance of the Natural Gas Transit and Integrated Gas Business segments,” the report says.
According to the statements posted on the company’s website, its sales revenue in January-September 2019 decreased by 3.7% (by UAH 6.36 billion), to UAH 165.308 billion, while gross profit increased by 10.6% (by UAH 5.164 billion), to UAH 53.848 billion.
In terms of geography of sales revenues, the largest share fell to domestic revenues with UAH 106.748 billion against UAH 113.236 billion in January-September 2018, the Russian Federation (UAH 55.977 billion and UAH 55.931 billion), Europe (UAH 2.31 billion and UAH 2.109 billion), and Egypt (UAH 273 million and UAH 392 million).
Naftogaz Ukrainy unites the largest oil and gas producing enterprises of the country. The group is a monopolist in transit and storage of natural gas in underground gas storage facilities, as well as in the transportation of oil by pipeline through the country.