Ukrainian gas company Naftogaz first-half loss widens to $1.6 bln

Naftogaz, Ukraine’s state-owned gas company, on Thursday reported a bigger loss in the first half of the year due to the impact of the war in the country following Russia’s invasion in February.

Naftogaz’s net loss widened to 57.16 billion hryvnias ($1.57 billion) from 1.65 billion hryvnias a year before, with most of the losses recorded in the first quarter, it said.

Naftogaz, whose finances have been strained since the war started, said additional deductions for bad debt reserves associated with decreases in the solvency of its counterparties, as well as higher purchase prices of imported gas compared with sales prices contributed to the losses.

The destruction of its assets due to military shelling by Russia also affected its first-quarter loss, it said.

The company did make a profit of 420 million hryvnias in the second quarter.

Naftogaz, which has defaulted on some of its bonds, in August secured the backing of bondholders for a partial restructuring. It said it continues to develop new terms for the restructuring of remaining bonds and intends to start a new consent solicitation process in the near future.

The final terms to be offered to bondholders are be approved by the government, it added.

Naftogaz remains under an order that prohibits it making any debt-related payments without the approval of the cabinet.

Naftogaz CEO Yuriy Vitrenko, who handed in his resignation early this week, said he expects his departure will speed up the appointment of a supervisory board.

Naftogaz has had no supervisory board since September 2021 due to the termination of powers of all its members, it said on its website. The process to appoint new ones was delayed due to Russia’s invasion of Ukraine.

The company said on Tuesday the government accepted Vitrenko’s resignation effective Nov. 3, without giving further details.

($1 = 36.5000 hryvnias)