Despite international sanctions targeting its Arctic LNG 2 project, Russia's Novatek reported a significant increase in net operating cash flow for 2025, even as its net profit declined. The company's financial performance indicates adaptation to the challenging operating environment.

Financial Performance Amid Sanctions

Novatek reported a net profit of 183 billion roubles ($2.36 billion) for 2025, a drop from 493 billion roubles in 2024, on revenues of 1.4 trillion roubles. However, the company highlighted a record net operating cash flow of 503 billion roubles ($6.5 billion), up from 357 billion roubles in 2024. This metric is considered a key indicator of financial health, showing strong cash generation from its core Russian pipeline gas and LNG assets. Analysts noted the company also posted a decade-high EBITDA of over 1 trillion roubles for 2025.

Analyst Assessment and Operational Adaptation

Analysts from Moscow brokerage BKS stated that "everything looks good" at Novatek, pointing to a "normalised net profit"—which excludes non-cash items—that fell by only 8% to 508 billion roubles, beating local consensus. An industry consultant noted the figures suggest Novatek has taken measures to optimise and adapt to current conditions. Operationally, while the sanctioned Arctic LNG 2 project did not deliver LNG to end-customers in 2024, it stored gas offshore and later exported 21 cargoes to China during the summer navigation season.

Production Figures

The company's total gas production remained flat year-on-year in 2025. However, its total Russian natural gas output decreased by over 3% from 2024 to 561 billion cubic metres.