The Board of Directors of JSC NC “KazMunayGas” (KMG) approved the payment of dividends for the results of 2019 in the amount of 81.7 billion tenge, which is approximately two times more than a year earlier, the company said.
According to the annual report of the company, in 2019 KMG’s net profit amounted to more than 1.1 trillion tenge ($ 3 billion), which is 67% more than a year earlier.
The company’s total revenue for the past year exceeded 6.8 trillion (more than $ 17.9 billion) with an average cost of Brent crude oil of $ 64.21 per barrel.
Last year, the company also directed part of its income from its activities to servicing external obligations.
In 2019, KMG allocated 997 billion tenge ($ 2.6 billion) for these purposes. At the end of the first quarter of 2020, KMG’s total debt decreased to $ 10.6 billion.
In the first quarter of 2020 alone, the national company’s revenue decreased by 21% compared to the same period last year, to 1.4 trillion tenge, and net profit fell by three times – from 309 billion tenge last year to 100 billion in this. Incomes from the share in joint ventures suffered the most, shrinking more than four times to 53 billion tenge.
That is, the drop in oil prices dealt a double blow to KMG. First, in the form of a reduction in revenue from the sale of raw materials, and then also in the form of devaluation of the national currency, which in turn depreciated due to a decrease in the cost of oil.
The company’s response to the current situation was cost reduction. In 2020, capital expenditures were reduced by 87.4 billion tenge (15% of the budget). Over five years, cost reduction will be more than 400 billion tenge. General administrative expenses will be reduced by 15.7 billion tenge. Operating expenses will decrease by 20.3 billion tenge in 2020 and 208 billion tenge in five years.
In total, in 2020 the company plans to reduce its expenses by 127.3 billion tenge.
KazMunayGas is a national vertically integrated oil and gas company, which accounts for 26% of the annual production of oil and condensate in Kazakhstan (90.5 million tons in 2019), 81% – oil refining, 15% – gas production, 57% – oil transportation and 79% of gas.
KMG shareholders are JSC NWF Samruk-Kazyna – 90.42% and the National Bank of Kazakhstan – 9.58%.