Page 138 - RusRPTSept21

and -2% vs. our $230/mcm expectation, but far below current prices of c$600/mcm...so we fully expect realized prices to rise substantially in the coming periods, to c$400/mcm in 3Q21 and, perhaps, to $500/mcm in 4Q21.
· Net debt fell 6% to c$46.5bn helped by that solid EBITDA number
· The call is scheduled for tomorrow afternoon. We expect most
questions to revolve around the launch of Nord Stream-2 this fall, production issues after the Urengoy fire, and how quickly Gazprom’s realized price will converge with European spot and futures prices.
Gazprom reports record 1H21 RAS net profit. Gazprom reported its 1H21 RAS results on 13 August. Revenue was up 46% y/y in 1H21 due to higher gas prices and the 28% y/y increase in exports to Europe.
Total costs were up 9% y/y, but gross profit jumped 117% y/y to RUB1.4trillion. Other income and other costs were down 11% y/y and 60% y/y, respectively, while net income improved to RUB718bn vs. a net loss of RUB254bn in 1H20.
Gazprom’s RAS results are not a direct read-across to its IFRS results, but they do show basic trends.
In 2Q21, total exports were up 28% y/y to 58.5bcm. Gazprom reported a 28% increase in exports to Europe and a 13% growth in exports to FSU countries. Sales in Russia expanded 14% y/y to 47.6bcm, and sales to China amounted to 2bcm vs. 0.9bcm in 2Q20.
Exports to Germany were up 44% y/y to 28.9bcm in 1H21, while exports to Italy were up 14% y/y. Exports to Turkey came back strong, up 211% y/y to 14.6bcm.
The solid results should be a decent indicator of what is to come with the 2Q21 IFRS results, though as we mention above, they are not a direct read-across. Our focus for Gazprom as of now is on exports via the Yamal-Europe pipeline, an issue on which we have seen just limited comments from the company.
Gazprom has raised its realised export gas price guidance for long-term contracts 30% to USD 269.60/kcm, Interfax reports. Separately, the company said, in a social media statement, that it might deliver 5.6bcm of natural gas through Nord Stream-2 this year.
138 RUSSIA Country Report September 2021 www.intellinews.com