Galnaftogaz Reports 2007 UAS Consolidated Financials
18 March 2008
Yesterday Galnaftogaz (GLNG: BUY) reported its 2007 financial results consolidated under local accounting standards (UAS). Net revenue grew 25.5% yoy to USD 644.3 mln, EBITDA margin increased from 4.5% to 5.3%, while its net margin was down from 1.4% to 0.9%. It also reported CapEx of USD 115.4 mln and net debt of USD 153.6 mln. Vladimir Nesterenko: Although our forecasts are based on IFRS principles, which differ to some extent from local accounting standards, the company’s move toward converging its local reporting to IFRS over the last two years makes its local reports more comparable with our forecasts. Generally 2007 performance was in line with our expectations (see the table below). The company’s actual EBITDA almost exactly matched our forecast (USD 34.1 mln vs. USD 34.0 mln), while its EBITDA margin was slightly lower (5.1% vs. 5.3%). The difference between actual shareholder equity and our forecast stem mostly from the fact that the company reflected proceeds from its share issue (held from Nov. 2007 to Jan. 2008) in 2007, while we put those in 2008. As Galnaftogaz managed to also spend the proceeds in 2007, our CapEx and net debt estimates differ from actual for the respective amount. The aforementioned differences do not have any impact on our 2008 forecasts.
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2007E IFRS 2007 UAS 2006 IFRS 2006 UAS
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Net revenue 664.4 644.3 514.7 513.5
Change yoy 29.1% 25.5%
Gross profit 59.0 87.8 35.7 52.2
Gross margin 8.9% 13.6% 6.9% 10.2%
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EBITDA 34.1 34.0 26.2 23.2
change yoy 30.0% 46.2%
EBITDA margin 5.1% 5.3% 5.1% 4.5%
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Net income 6.3 5.6 8.3 7.0
change yoy -24.0% -20.0%
Net margin 1.0% 0.9% 1.6% 1.4%
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Equity 94.6 148.0 89.2 74.0
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Operating CF -15.2 6.9 13.2 4.8
CapEx -77.4 115.4 42.7 46.1
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Net debt 200.7 153.6 108.2 99.2
Debt/Equity 2.12 1.04 1.21 1.34
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