Page 61 - UKRRptAug19

9.2 Major corporate news 9.2.1 Oil & gas corporate news
The CEO of Ukraine’s national gas company Naftogaz Andriy Kobolyev earned $11mn in pay and bonuses last year, according to DT.UA. Of the total, 91% was his share of a board bonus of 1% of winnings last year from the Stockholm Arbitration against Gazprom. Since Gazprom is appealing that decision, it is not clear if the bonuses have been paid in Kyiv.
Naftogaz paid UAH58.6bn to the state budget in the first half of 2019
Naftogaz group paid nearly UAH58.6bn in taxes and duties to the state budget. Naftogaz group’s contribution accounted for more than 15.9% of the state budget revenue in the first half of 2019. Naftogaz group remains Ukraine’s biggest taxpayer. In 2018, the group paid UAH137.8bn in taxes and dividends to the state and local budgets.
National joint-stock company Naftogaz in 2018 saw UAH11.567bn in net profit , which is 70.6% less than in 2017 (UAH39.449bn), according to the group's consolidated statements published on Thursday.
The group's net income decreased by UAH27.9bn compared to 2017, mostly due to the effects of reflecting the Stockholm arbitration decisions in both 2017 and 2018. In 2017, Naftogaz recognized UAH12.6bn of net positive effect of the Stockholm arbitration decisions on the group's operating income. In March 2018, Naftogaz recognized expenses of UAH4.8bn related to the additional VAT paid by the group in relation to the awards.
In addition to the one-off effects of the arbitration awards, the following factors have influenced the group's results for 2018. The allowance for impairment of receivables increased by UAH7.0bn compared to 2017 due to a weaker collection of payments for balancing services.
According to a document audited by Deloitte, sales revenue grew by 12.7% or UAH28.834bn in 2018, to UAH256.312bn, and gross profit – by 10.2% or UAH7.152bn, to UAH77.483bn.
In terms of segments, revenue in 2018 was received from an integrated gas business (UAH137.825bn, in 2017 – UAH118.447bn), gas transit (UAH72.347bn, 2017 – UAH73.937bn); Ukrnafta (UAH36.113bn, 2017 – UAH26.907bn); gas domestic transmission (UAH27.168bn, in 2017 – UAH27.621bn); oil midstream and downstream (UAH12.98bn, in 2017 – UAH11.33bn); gas storage (UAH1.796bn, in 2017 – UAH0.958bn); other (UAH1.378bn, in 2017 – UAH1.361bn); elimination (-UAH33.295bn, in 2017 – (-UAH33.083bn)).
In terms of the geography of sales revenues, the largest share came from domestic revenues (in 2018 – UAH177.18bn, in 2017 – UAH147.309bn), the Russian Federation (in 2018 – UAH76.048bn, in 2017 – UAH77.511bn), Europe (in 2018 – UAH2.579bn, in 2017 – UAH2.201bn), Egypt (in 2018 – UAH0.505bn, in 2017 – UAH0.457bn).
The total amount of borrowings of the group in 2018 decreased by 5.6% (by UAH3.316bn) and by the end of the year amounted to UAH55.999bn. The cost
61 UKRAINE Country Report August 2019 www.intellinews.com