Naftogaz Ukraine swings to net profit of $210 mln in Q1, reduces consolidated loss to $38 mln

MOSCOW. July 12 (Interfax) - Naftogaz Ukraine, the parent company of Naftogaz Group, earned a net profit of UAH7.7 billion (about $210.6 million at current rate) in the first quarter of 2023, compared to a net loss of UAH24.6 billion in the same period last year, Ukrainian media reported, citing a company press release.

This is a "significant result" considering the loss in the first quarter of 2022, the state oil and gas company said. "Such a result became possible thanks to the significant improvement of the financial performance of key group companies compared to the first quarter of 2022," Naftogaz CEO Alexei Chernyshev was quoted as saying in the release.

The group also reduced its consolidated loss to UAH1.395 billion (about $38.15 million) in the first quarter of 2023 from UAH57.579 billion a year earlier.

Consolidated sales fell 23.1% to UAH68.54 billion. The group's gross loss decreased to UAH12.097 billion in the quarter from UAH34.156 billion a year earlier.

The group posted an operating profit of UAH3.4 billion in the quarter, compared to a loss of UAH57 billion a year earlier, its consolidated financial statement showed.

The "financial statement also shows that the group's main reporting segments showed a net operating profit for the first quarter of 2023," the press release said.

"The group's companies, ensuring the fulfilment of special obligations, supplying natural gas to socially vulnerable categories of consumers, also significantly improved the level of collection of money for supplied gas. This enabled them to significantly improve their operating financial result: losses in the first quarter of 2023 totaled only UAH6.3 billion, compared to losses of UAH33 billion in the first quarter of 2022," the company said.

The company said it successfully concluded the 2022/2023 heating season in April subject to special obligations and "not having received any additional financing from the state."

"Furthermore, even without additional support the group is not only maintaining, but increasing production of Ukrainian gas," Naftogaz said.

Naftogaz includes Ukraine's largest oil and gas producers, the main one being Ukrgasvydobuvannya, as well as trading, retail and heating companies. The group has a monopoly on natural gas storage in underground storage facilities (Ukrtransgaz) and oil transportation by pipeline through the country (Ukrtransnafta).

The official exchange rate was UAH36.57/$1 on July 10.