REUTERS
The reduction in Naftogaz's profit by US$379.8 million was caused, among other things, by legal expenses.
National Joint-Stock Company Naftogaz of Ukraine in 2018 posted UAH 13.6 billion (US$511.5 million) in net profit, which was 64% down from 2017.
The reduction in net profit was due to the fact that the company's financial statements for 2017 recorded positive results from the Stockholm Arbitration's rulings over litigation with Russia's Gazprom in the amount of UAH 12.6 billion (US$478 million). Moreover, the financial statement included VAT refund recognized by Naftogaz in accordance with the arbitration award on gas transit to the tune of UAH 4.8 billion (US$180.5 million), the Naftogaz press service said, referring to the company's financial statements audited by Deloitte.
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The reduction in Naftogaz's profit by UAH 10.1 billion (US$379.8 million) was also caused by spending on legal disputes. Most of this amount, namely, UAH 9.6 billion (US$361 million), was spent on a lawsuit against JSC Ukrtransgaz to cover unbalances in Ukraine's gas transportation system (GTS).
"At the same time, Naftogaz received UAH 5.1 billion [US$191.8 million] in profit from the sale and supply of natural gas. However, the company posted UAH 2.9 billion (US$109 million) in loss from the sale of gas to consumers under public service obligations [PSO] and received almost UAH 8 billion (US$301 million) in profit from the sale of gas to other consumers at unregulated prices, which was 1.5 times up from 2017," the report said.
As UNIAN reported earlier, Naftogaz in 2017 increased its net profit by 2.2 times, to UAH 39.4 billion (US$1.5 billion).
The victory in the arbitration proceedings against Gazprom was the main factor of the Naftogaz group's profitability in 2017. Otherwise, the group would have incurred UAH 7.4 billion (US$278 million) in net loss, the press service added.
UNIAN memo. NJSC Naftogaz of Ukraine is the largest state-run vertically integrated oil and gas holding whose subsidiaries account for about 90% of oil and gas production in Ukraine. Naftogaz develops oil and gas fields, produces crude oil and natural gas. Its core business is also transportation and trade in fuel through its own network of filling stations.