Gazprom's Financial and Economic policy. June 2008

Transcription

1 Gazprom's Financial and Economic policy June 2008

2 Key targets of Gazprom's financial and economic policy Facilitating steady financing of Gazprom's development aimed at increasing its value Raising the Company's ratings Reducing the loan capital cost Securing a sustainable financial position of the Company Maintaining a well-balanced debt portfolio Coherent budgetary policy Exerting control over the debt burden level Execution of the Borrowings Program and asset acquisition funding in the insecure environment of global financial markets Supporting strict discipline in the cost management area Manageable expenditure growth rates Enhancing transparency through introduction of advanced automated accounting systems of inspection and control over the financial and operating activities Creating an integrated information space 1

3 2007 financial highlights Stable receipts growth Receipts from sales, RUB bln (1) % +42.1% % Sales receipts surplus structure, RUB bln (1) Gas Russia Gas FSU Gas Western Sales of Crude oil and Gas Miscellaneous 2007 Europe refined oil gas condensate transportation (1) Data is quoted here as provided in the consolidated financial (accounting) statements of Gazprom and its subsidiaries, prepared in compliance with the Russian legislation 2

4 2007 financial highlights Stable financial position Profit on sales, RUB bln (1) Cash flow from operational activities (1), RUB bln Net income movement, RUB bln (1) net income Profit increase Increase in food commodities Decline in other Alteration in Miscellaneuous (3) prime cost, sales net profits (2) minority share of work and services, commercial and managerial costs (1) Data is quoted here as provided in the consolidated financial (accounting) statements of Gazprom and its subsidiaries, prepared in compliance with the Russian legislation (2) Other net profits the spread between other profits and other expenses (3) The "miscellaneous" table includes: the rise of net interests payable, downturn in the Company's subsidiaries reinvested profit, tax reduction (net of excise and export duties) net income 3

5 Strengthening control over operational expenses Manageable expenditure growth rates Growth rates for main expenditure items (1)(2), % 30% 25% 21.5% 24.6% 20% 16.4% 18.1% 15% 10% 11.7% 12.5% 10.9% 9.4% 9.0% 9.2% 13.3% 11.9% 5% 0% Inflation in the Russian Federation Increase in remuneration expenses and social needs allocations Increase in prime cost of marketed goods, products, works & services, commercial and managerial costs (net of expenses for depreciation of basic and intangible assets, purchased gas, oil and taxes included into the prime cost) (1) Data is quoted here as provided in the consolidated financial (accounting) statements of Gazprom and its subsidiaries, prepared in compliance with the Russian legislation (2) Taking into account the period of Gazpromneft's incorporation into the Group, the company's information is included in the cost increase assessment only for

6 Well - balanced debt portfolio Retention of financial stability indicators on the investment level Gazprom Group's debt, RUB, bln (1) Gazprom Group's relative debt burden (1)(2) Gross debt Net debt By gross debt By net debt Increase in debt volume by late 2007 was conditioned by major strategic acquisitions made by Gazprom Group such as Sakhalin II, Mosenergo and other energy assets (1) Data is quoted here as provided in the consolidated financial (accounting) statements of Gazprom and its subsidiaries, prepared in compliance with the Russian legislation (2) Relative debt burden is defined as the difference between the gross debt (net debt) and receipts from sales minus other costs, plus other costs, profits from participation in other companies, depreciation costs, adjusted reserves attributed to asset devaluation. 5

7 Optimal debt structure Visible results of harmonized financial strategy (debt volume, %) Debt coverage structure (1) 17.5% 11.5% 19.7% 25.0% 82.50% 88.5% 80.3% 75.0% Long-term credits and loans Short-term credits and loans (debt volume, %) Share of secured debt (2) Dynamics of average debt value (3) 9.30% 76.1% 89.7% 96.9% 98.1% 7.80% 7.14% 6.66% 6.95% 7.09% 23.9% 10.3% 3.1% 1.9% Secured debt Unsecured debt (1) Data is quoted here as provided in the consolidated financial (accounting) statements of Gazprom and its subsidiaries, prepared in compliance with the Russian legislation (2) Data calculated in conformity with the Russian Accounting Standards (3) According to the managerial accounting data for the parent company

8 Sakhalin II project financing Unique experience new standards of large-scale project financing Project infrastructure Project participants Project description Gazprom 50 % plus one share, Shell 27.5 %, Mitsui 12.5 %, Mitsubishi 10 % Operator Sakhalin Energy Investment Company Ltd. Reserves (A+B+C1+C2) Gas 634 bcm Crude oil 173 mln t Project financing June loan documentation package worth USD 5.3 bln signed for 12 years Major project creditor - the Japan Bank for International Cooperation - financing totaling USD 3.7 bln Consortium of the largest Japanese and Western European commercial banks - financing equal USD 1.6 bln The fund-raising transaction terms do not imply debt consolidation for the project shareholders 7

9 Liberalization of the Russian gas market Key source of the Company's potential development Gas price increase for industrial and residential (1),(2) Volume of gas traded on the electronic trading platform (ETP),bcm and excess of ETP prices over the regulated ones (RUB per thousand cu m) +25% % % % % % The principle of equal profitability for the domestic and foreign markets % 39.4% 36.9% 26.7% 1 th guart th guart th guart th guart Gazprom (left scale) 60% 50% 40% 30% 20% 10% 0% Independent suppliers (left scale) th. guart 3 th guart. 1 th guart. (app.) (app.) (app.) (app.) Negotiated price range (3) +60% +50% +40% +30% +20% +10% Regulated domestic prices 3 th guart (app.) (app.) Average excess of ETP gas price over regulated prices (right scale) 2007 overall trading volume on the ETP more than 7 bcm In 2007 ETP gas prices surpassed the regulated ones by 37% on average 1) Price forecasts pursuant to #42 Minutes of the Management Committee meeting dated November 30, 2006 and #333 Government Decree dated May 28, ) Prices are given for the corresponding period 3) Defined as a regulated wholesale gas price plus an increase added to the price of the corresponding period pursuant to #333 Government Decree 8

10 Enhancing the transparency and corporate management quality The Company's informatization strategy Enhancing овышение прозрачности transparency финансово- хозяйственной of the financial деятельности and business и activities совершенствование and improving corporate корпоративного governance управления Creation of an integral information space based on: standard technical requirements unified reference data standard regulatory, organizational and methodological principles Creation of a unified corporate data bank Development of data collection, processing and analysis systems involving all aspects of Gazprom Group's activities Organizational level Managerial accountability organization system Corporate data bank Examples of accountability (demonstrations) Administration level Subsidiary level System of functions and authorities Plan indicators financial Consolidated accountability on the Company Plan indicators pricing and types of activities Plan indicators physical Actual indicators financial, pricing, physical Accountability of geological exploration results Miscellaneous 9

11 The Company's value growth Gazprom among three largest global energy companies in terms of capitalization Capitalization, USD bln, and price dynamics of Gazprom's shares on MICEX, RUB per share (1) Dividends per Gazprom's share, RUB per share (2) (3) Gazprom's credit ratings 2002 (4) 2005 (4) 2006 (4) 2007 (4) 2008 (5) Moody's Нет рейтинга Baa2 A3 A3 A3 / Stable S&P B+ BB BBB BBB BBB / Stable Fitch Ratings Нет рейтинга BB BBB- BBB- BBB / Stable (1) Capitalization data is calculated based on the year-end share price for the relevant year (2) Data is quoted here as provided in the consolidated financial (accounting) statements of Gazprom and its subsidiaries, prepared in compliance with the Russian legislation (3) Is subject to consideration at the Gazprom General Shareholders Meeting according to the Gazprom Board of Directors's recommendation (4) By the end of the relevant period (5) Currently effective 10

12 Thank you for your attention!