Naftogaz Ukrainy reports Q1 profit on strong prices

State Naftogaz Ukrainy reported Q1 net income of 12.6bn hryvnias ($460mn) owing to higher gas prices at European gas hubs in its unaudited and unconsolidated accounts. This inconsistency makes comparisons with annual accounts incorrect, it said May 5.

"Sadly, the strength of this financial result remains in doubt mainly owing to the failure to settle financial problems regarding transportation, distribution and deliveries of gas to end users," it said.

These traditional problems have worsened over the quarter. "Therefore, as a national company, we will actively offer our help to the state in resolving them,” said the new CEO Yuri Vitrenko.

He replaced Andriy Kobolev, his one-time manager, in late April following the cabinet of ministers’ decision to sack him immediately April 28. Vitrenko said he would work to raise gas production and energy security and so lower prices for the population.

The company’s supervisory board will cease work May 14, having handed in their resignations en bloc April 30. The company said – in the latest English-language statement on the company's website on any topic – that it would continue  working for two weeks to "ensure the continued well running of the company."

Its members met the "newly appointed CEO and other executive board members. The latter raised their concerns about the ability to continue serve the company further."

The abrupt change, circumventing the supervisory board which would normally take the decision whether to replace the CEO ahead of his contract expiry, has alarmed international financial institutions and the European Union.