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    Novatek Sees Steep Decline in Q3 Profits


The company's gas production during the three months was stable year on year, in contrast to declines earlier in 2020.

by: Joe Murphy

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Novatek Sees Steep Decline in Q3 Profits

Net income at Russian gas firm Novatek slumped to rubles 13.2bn ($170mn) in the three months ending September 30, down from rubles 370bn a year earlier, it reported on October 28.

Revenues were down 13.4% at rubles 163.8bn, while core earnings (Ebitda) fell 10.2% to rubles 93.9bn. Novatek blamed the weaker results on low prices and devaluation of the ruble, as well as other factors relating to the coronavirus pandemic.

"These exogenous events are outside of the group’s management control, and their scale and duration are difficult to assess," Novatek said. "Despite the economic instability on the global markets, the group continues to achieve strong operating results and implement its main investment projects in accordance with the Group’s approved corporate strategy."

Novatek's gas output was stable in the quarter, down only 0.8% year on year at 16.6bn m3. It fell 6% yr/yr in the first nine months of the year, however, to 54.1bn m3.

The company announced separately that it had entered into long-term agreements to charter six Arc7 LNG tankers from Russian shipping group Sovcomflot and Japan's Mitsui OSK Lines. The vessels, which will be built by South Korea's Daewoo Shipbuilding & Marine Engineering, will serve Novatek's Arctic LNG-2 project, due online in 2023.

Novatek has signed deals chartering 15 other tankers for the project from its joint venture with Sovcomflot, Smart LNG. Those vessels will be constructed at the Zvezda shipyard in the Russian Far East.