Forever losing the Ukrainian gas monopoly Naftogaz failed to once show successful financial results. Made public statements clearly designed to show the success of the ongoing reforms, including the correctness of the radical increase in gas prices for the population. However, the real secret to the profitability of Ukrainian monopoly in another.
Ukrainian gas monopoly Naftogaz has reported a substantial profit in the first half to $ 21,84 billion hryvnia ($880 million), against 4.47 billion hryvnia ($180 million) net loss in the same period last year, according to NAC.
“This profit was a result of the devaluation of the hryvnia, increase in gas prices. And I think the merit of Gazprom is also essential”
The company explains its success by the growth of more than double the gross profit from rendering services on gas transit (UAH 18.8 billion) and net profit of wholesale trade of gas (UAH 12.9 billion).
Now the state monopoly does not need to budget the money to Naftogaz. All thanks to allegedly reform and increase gas tariffs for population and enterprises. “Reforming the gas market and the gradual reduction of prices of natural gas sales has allowed Naftogaz to ensure the formation of net profit in the first half of 2016 and to turn from the company, which was financed from the budget, the country’s largest taxpayer”, – stated in the message of the NAC.
We will remind that this spring Ukraine finally brought gas prices for its population and industries at the European level. However, having missed the fact that the level of income in Ukraine decreased to the level of the poorest African countries. The downside is the growth of debt of households and enterprises before Naftogaz.
In Naftogaz and the energy Ministry of Ukraine have repeatedly justified that Naftogaz remains unprofitable due to extremely low tariffs for gas and the necessity of the state to subsidize the cost of fuel. Literally in October last year, Minister of energy of Ukraine claimed that Naftogaz will be another two years is unprofitable: the imbalance will be 7-8 billion (360 million dollars) and 3 billion of them it will be necessary to close out budget. “As long as the government subsidizes the price of gas, this situation will continue”, – assured the then Minister of energy. The IMF demanded from Kiev to abandon the outdated scheme of subsidising gas tariffs to reduce budget deficit.
Naftogaz published data trying to prove that the transition to market gas prices had a positive effect on the company. That’s just the population and industry of Ukraine has lost a lot. And in the end won nothing.
As pointed out by Ukrainian economist Oleksandr Okhrimenko, the budget deficit of Ukraine in the first half amounted to 35 billion, exactly the same deficit was in 2013. “But then said that the budget deficit is so big because the budget is financed by Naftogaz. Now, like the money to Naftogaz are not going, it is profitable, but the budget deficit still somehow 35 billion UAH”, – the expert is surprised.
In the Naftogaz forget to thank Gazprom, which increased the transit of gas through Ukrainian territory and pays for it in dollars, which is especially advantageous for the current devaluation of the hryvnia.
“The growth of the net profit of Naftogaz is associated with the growth of Russian gas transit to Europe via Ukraine. Growth in the first half was rather big and amounted to 31%”, – says Anna Kokoreva of “Alpari”.
In addition, the cost of transit has increased due to the imposed by Ukraine on 1 January 2016 of the value added tax at 20% and the change in the methodology of calculating transportation cost. “In fact the cost of transit for Gazprom has increased almost three times. Naftogaz did not work efficiently, it went into profit by raising levies from a Russian company,” – says Kokoreva.
Reform of Naftogaz to profit is irrelevant. Monopoly as was opaque, corrupt and inefficient, and left.
“Once Yatsenyuk promised that the balance of state-owned companies will become public, open and transparent. But it’s been how long, and Naftogaz remains opaque. Made the presentation, said a common phrase, but why such crazy expenses in the company where this money goes, why are non-transparent tenders, why is the money stolen, no one can explain,” – says the newspaper VIEW CEO of the Ukrainian analytical center Alexander Okhrimenko.
Moreover, in his opinion, it was drawn a profit, which is still useless. “This is accounting, not tax profits, and it is easy to draw,” – says Okhrimenko. And drew her Naftogaz more to “self praise”, he said.
“We always have the authorities want to control the state monopoly and earn a profit. So the question now is, who are these 20 billion stolen, because there are a lot of. It is possible that these 20 billion after six months, disappear in an unknown direction”, – predicts Okhrimenko.
Thus it is necessary to pay attention to the other – figure debt load. “Naftogaz very large loans to the state Bank. About 30% of the total loan portfolio of the Bank’s loans to Naftogaz. It is a huge risk at one point. To repay these debts to Naftogaz,” says Okhrimenko.
Another paradox is that a profitable company can find the money for the purchase of imported gas. Reverse gas from Europe she buys still on credit.
Member of the Supervisory Board of the Institute of energy strategy (Ukraine) Yuriy Korolchuk believes that Naftogaz has managed to accumulate profit in the first half just because almost did not buy imported gas for their money. The Russian gas do not buy, and the reverse from Europe – on the loans, which go separately in the financial statements. “Now in Ukrainian underground storage facilities, only 11 billion cubic meters, and last year was already pumped 14 billion cubic meters. That is, if the money were spent on the purchase of gas, not now. This is also the reason is quite conditional success,” says Korolchuk.
“The merits of the current head of the company in the profits not. Can play the role of a political factor – I want to demonstrate the effectiveness of the reforms. But it was conditional reform, management, in most companies, no reform was carried out. This profit was a result of the devaluation of the hryvnia, increase in gas prices. And I think the merit of Gazprom is also important,” sums up Korolchuk.Related posts: