Naftogaz's revenue up 75% in 2008 – IFRS results

Naftogaz of Ukraine released its 2008 audited IFRS accounts this morning, reporting net revenue of UAH 53.1 bln (up 74.7% yoy), gross profit of UAH 4.2 bln (down 9.4% yoy), and a net loss of UAH 2.0 bln (vs. a net loss of UAH 0.1 bln in 2007). The publication of the company’s IFRS accounts was long overdue, according to its Eurobond terms, it was due on July 31, 2009. In its report, Naftogaz said that it expects transit tariffs for Russian gas across Ukrainian territory to increase 57-60% in 2010; the current rate is USD 1.7 for 1,000 m3 transited over 100 km. Naftogaz also announced that it has started negotiations with foreign banks on the restructuring of USD 1.6 bln in debt. Naftogaz said it expected to conclude restructuring arrangements by the end of the year. Andriy Gerus: We think that Naftogaz’s net loss was mainly caused by the revaluation of the company’s loans that were mostly USD-denominated. At the same time, we estimate the 57-60% increase in transit tariffs expected by Naftogaz in 2010 as overly optimistic.