Kazakh KMG EP’s profit decreases in 2014
Baku, Azerbaijan, March 3
By Elena Kosolapova - Trend:
JSC KazMunaiGas Exploration Production ("KMG EP" or "the Company") announces its consolidated financial statements for the year ended 31 December 2014, the company said March 3.
"Net profit for 2014 was 47bn Tenge ($263m), a 67 percent decrease compared to 2013, largely due to a significant impairment charge in relation to JSC Ozenmunaigas recognized in Q4 2014,' the statement says.
As previously announced, in the first quarter of 2014, a 27bn Tenge ($162m) impairment charge related to JSC "Ozenmunaigas" was made. The impairment charge related primarily to an increase in employee benefits and an increase in export customs duty from $60 to $80 per ton, effective from April 2014.
In Q4 2014, due predominantly to declining crude oil prices, management of the Company has carried out a formal assessment of the recoverable amount of its assets. As a result, an additional impairment loss of 228 billion Tenge ($1,274m), related to JSC "Ozenmunaigas", was recognized which effectively reduced the carrying value of the assets of JSC "Ozenmunaigas" to nil on December 31, 2014.
The Company also recorded 53bn Tenge ($296) foreign currency translation difference, thus total comprehensive income, net of tax was 100bn Tenge ($559m), the statement says.
The Kazakh national bank conducted the Tenge devaluation at 19 percent in February 2014.
Revenue in 2014 was 846bn Tenge ($4,722m), a 4% increase compared with 2013, mainly due to an increase in the average domestic sales price by 20% and higher export price in Tenge (because of an 18% increase in the average Tenge-US dollar rate), partly offset by lower export volumes. Total revenue and other income including the share of results of associate and joint ventures of 60bn Tenge ($336m) and finance income of 21bn Tenge ($116m) was 927bn Tenge ($5,174m), 4% more than in 2013.
Production expenses in 2014 were 212bn Tenge ($1,183m), a 31% increase compared with 2013 mainly due to increased employee benefit expenses.
Capital expenditure in 2014 was 128bn Tenge ($715m), which is 11% less compared to 2013 as a result of a decrease in construction expenses and reduced fixed assets investments partly offset by an increase in production drilling expenses due to increase in drilling cost per well. In 2014 the Company drilled 297 wells compared to 311 wells in 2013.
In 2014, KMG EP's share of results of associate and joint ventures was 60bn Tenge ($336m) compared to 51bn Tenge ($334m) in 2013.
As of 2014, KMG EP is among the top three oil producers in Kazakhstan.
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