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74% y/y to UAH4.4bn.
Naftogaz’s operating cash flow before working capital changes improved 2.5x y/y to UAH37.7bn in 9M21, but net cash flow from operations was negative at UAH19.4bn (vs. positive UAH16.1bn a year ago). This was mostly a result of inventories built up for UAH50.9bn in 9M21 (vs. cash inflow from inventories releases of UAH13.0bn a year ago).
Cash outflow from operations and investments into PP&E for UAH11.0bn (-7% y/y) resulted in an overall cash outflow from Naftogaz accounts of UAH28.8bn in 9M21. As a result, the company’s cash and equivalents decreased 84% YTD to UAH5.9bn and its net debt increased 93% YTD to UAH56.4bn as of end-September 2021. Its ratio of net debt to LTM EBITDA reached 1.52x as of end-September, up from 1.25x as of end-December 2020.
The results imply that in 3Q21 alone, the company’s revenue decreased 5% y/y to UAH30.5bn, EBITDA turned to negative UAH0.5bn (from positive UAH0.5bn in 3Q20) and net loss halved y/y to UAH2.7bn. Its quarterly cash outflow from operations was UAH37.2bn (vs. UAH1.1bn inflow in 3Q20) and the increase of net debt was UAH48.5bn (up 9.2x y/y).
Ukrtransnafta reduced oil transportation by 5.5%. In November 2021, the volume of oil transportation to oil refineries in Ukraine decreased by 1% to 223 thousand tonnes of oil, announced Naftogaz. The transit of oil by pipeline through the territory of Ukraine was also reduced by 6.4% to 1.04mn tons. In January-November, 14.2mn tonnes of oil were pumped through Ukrainian pipelines, which is 2.6% less than in the same period of last year. Of these, the volume of oil transportation to Ukrainian refineries is 2.7mn tonnes (13.5% more than in 11 months of 2020), transit - 11.5 million tonnes (5.8% less).
The EU investment portfolio included the project to convert Ukrainian GTS to hydrogen delivery. The program to prepare Ukraine's gas distribution systems to deliver hydrogen and other "green" synthetic gases to consumers became one of the projects selected by the European Hydrogen Alliance. In addition, the hydrogen project of the Ukrainian Regional Gas Company (RGC) became one of 750 projects, which were selected by the European Pure Hydrogen Alliance and entered the portfolio of investment projects. This portfolio aims to integrate all parts of the hydrogen market and specific projects with investors and financing.
A new gas field has been discovered in the Kharkiv region.
Ukrgazvydobuvannya has opened a new natural gas field in the Kharkiv region with promising resources of up to 5 bln cubic meters of "blue fuel". The exploratory well that discovered the field provides 239,000 cubic meters of gas per day. According to preliminary estimates, the field's resources are up to 5 billion cubic meters of gas," the statement said.
Ukrgazvydobuvannya reduces gas production by 4.3%. In January-November 2021, the company which is a subsidiary of Naftogaz produced 12.49 bln cubic meters of natural gas, which is 4.32% less than in the same period last year. In November of this year, the company produced 1.126 bln cubic meters of natural gas (1.97% less, compared to the same period of last year). In 11 months, gas production decreased by 4.2% to 11.8 bln cubic meters. During the 11 months of 2021, Ukrgazvydobuvannya drilled 48 new wells, carried out 222 overhauls of wells, performed 575 coil tubing
71 UKRAINE Country Report January 2022 www.intellinews.com