Galnaftogaz 2007 IFRS audited accounts: Higher margins, lower leverage

According to the Galnaftogaz’ (GLNG: BUY) IFRS statements released yesterday, its net sales grew 23.5% yoy, to USD 635.4 mln, while EBITDA increased 38.1% (USD 36.2 mln) and net income was up by 48.3% (USD 12.3 mln). See the table below for further details.Vladimir Nesterenko: Although sales were slightly behind our forecast, the company’s operating profitability exceeded our expectations. The higher than expected net margin stems mainly from lower leverage compared to our forecast: in its 2007 eoy equity line, the company reflected additional capital raised during a share issue completed at the beginning of 2008.

              2007 Actual 2007 Forecast   2006
———————————————-
Net revenue         635.4         664.4     514.7
change yoy          23.5%         29.1%    n/m
Gross profit*         49.8           59.0      35.7
Gross margin         7.8%          8.9%   6.9%
EBITDA                36.2            34.1     26.2
change yoy          38.1%         30.0%    n/m
EBITDA margin     5.7%          5.1%    5.1%
Net income           12.3           6.3         8.3
change yoy          48.3%        -24.0%    n/m
Net margin           1.9%          1.0%   1.6%
———————————————-
Operating CF      43.6          (15.2)   11.3
CapEx             (108.7)        (77.4)   (42.7)
———————————————-
Equity               162.8          94.6   89.2
Net debt            161.4         200.7  108.2
D/E                   0.99           2.12    1.21
Leverage            1.48          2.71    1.79

* adjusted for D&A