Gazprom intends to intensify operations on lending markets despite not borrowing at start of year

MOSCOW. Sept 22 (Interfax) - Gazprom intends to intensify operations on the lending markets despite not attracting loans at the beginning of the year amid a favorable price environment, Famil Sadygov, Gazprom CFO and deputy chairman of the executive board, said when commenting on the concern's updated draft budget.

Sadygov noted that the draft budget in the new version reflects an increase in revenues from the sale of gas by 34% compared to the original version of the budget.

"I would like to note that the decline in exports has been completely offset by an increase in the average price of selling gas to non-FSU countries. Growth in revenues, in particular, renders it possible to offset for the increase in operating expenses associated with rising payments for the mineral extraction tax (MET) in the second half of the year," Sadygov said.

"Solid results over the six months of 2022 have allowed us to avoid attracting external borrowings for the parent company, though we consider it necessary to intensify operations on the lending markets in the second half of the year. We expect the Gazprom Group's total debt to remain at the previous year's level by the end of this year," Sadygov added.

"In addition, a significant amount of funds is planned to be allocated to pay interim dividends for the first six months of 2022. Dividend payments are expected to total 1.208 trillion rubles, corresponding to 51.03 rubles per share. Even when accounting for growth in capital expenditures, Gazprom Group's free cash flow should fully cover dividend payments, which is in line with our long-term principles of financial stability," the CFO said.

The expected increase in revenues has allowed Gazprom to continue implementing its investment program fully, emphasizing the development of key projects, including the Power of Siberia gas pipeline and its resource base, as well as the Yamal gas production center. Moreover, the volume of investment assimilation should outstrip the volume of financing owing to advance payments from previous periods.

Sadygov also assured that Gazprom continues to adhere to the principles of strict cost limits and balanced cash flows.