Naftogaz Ukraine increases net loss 97.1% YoY to $1.56 bln in H1 2022

MOSCOW. Nov 7 (Interfax) - Naftogaz Ukraine posted a net loss of 57.159 billion hryvnia [$1.56 billion] in January-June 2022, an increase of 97.1% from 1.65 billion hryvnia in the first half of 2021, according to company's consolidated financial statements.

The company's press service reported that Naftogaz generated net profit of 420 million hryvnia in the second quarter of 2022. The loss totaled 57.579 billion hryvnia in the first quarter of the year.

The main factors behind the loss forming in the first quarter were additional contributions to the reserves of doubtful debts associated with a decrease in the assessment of the solvency of the company's counterparties; as well as the negative difference between the purchase price of imported gas and the price for selling it regarding the special obligations imposed on the company by the government [selling gas at preferential prices]. The company was also unprofitable in January-March owning to the loss of assets.

"The company has been able to adapt to the new conditions as of April, and ensured a profit of 420 million hryvnia in the second quarter of 2022, particularly owing to reducing costs and legislatively settling the matter of compensation for the special obligations imposed by the government on the company," according to the statement.

Consolidated income from selling Naftogaz products increased 18.2% to 124.8 billion hryvnia in the first half of 2022.

Meantime, based on the executive board's approved consolidated financial plan for 2022, Naftogaz expects to generate net profit of 91.8 billion hryvnia for the year.

Naftogaz includes Ukraine's largest oil and gas producers, 100% of Ukrgasvydobuvannya; 50% plus one share of Ukrnafta; has a monopoly on natural gas storage in underground storage facilities, 100% of Ukrtransgaz; and oil transportation by pipeline through the country, 100% of Ukrtransnafta; and is actively developing gas supplies to households.

The official exchange rate as on November 3, 2022, was 36.57 hryvnia/$1.