Govt approves Naftogaz's financial plan for 2017 with net profit of UAH 21.8 bln

The Cabinet of Ministers of Ukraine at a meeting on Wednesday approved a financial plan of national joint-stock company Naftogaz Ukrainy as a separate legal entity for 2017 with expected net profit of UAH 21.781 billion, which is 17.9% less than in 2016 (UAH 26.529 billion).

According to the draft document, net revenue of Naftogaz could grow by 29.5% compared to 2016, to UAH 208.944 billion. UAH 147.034 billion could be received from wholesale trade with fuel (UAH 99.591 billion in 2016) and UAH 61.402 billion – from transit and internal transportation of gas (UAH 61.385 billion in 2016).

Deputy Prime Minister and Minister of Economic Development and Trade Stepan Kubiv proposed to review the revenue figures in the financial plan for 2017, taking into account the prices as of April 1, 2017.

Gross profit would fall by 7.6%, to UAH 41.664 billion.

Earnings before interest, taxes, depreciation and amortization (EBITDA) in 2017 are approved at UAH 14.211 billion, which is 60% less than in 2016 (UAH 34.874 billion).

Operating profitability is expected at 10% compared to 16% in 2016.

Capital investment is approved at UAH 1.11 billion compared with UAH 36.011 million in 2016.

According to the explanatory note to the document, Naftogaz could import 8.5 billion cubic meters (bcm) of gas in 2017, sell 25.5 bcm of gas and have transit of 74 bcm of gas.

Average price of imported gas, taking into account the cost of entering the Ukrainian gas transport system, is $245 per 1,000 cubic meters at the exchange rate of $27.60.