Novatek, the country's second-largest gas producer, reported a 13.7 percent year-on-year rise in its 2009 full-year net profits Friday, beating analysts' estimates on the back of rising output and prices.

Novatek has been able to ramp up its gas output and take market share from Gazprom, despite an overall fall in gas production in the country. The state-run gas export monopoly owns about 20 percent in Novatek.

The company said net profit attributable to shareholders rose to 26.043 billion rubles ($889 million) in 2009. Analysts polled by Reuters had expected net profit to rise to 25.59 billion rubles.

Novatek said its 2009 earnings before interest, tax, depreciation and amortization increased nearly 8 percent to 39.6 billion rubles, beating expectations of 38.3 billion rubles.

Revenue grew 13.5 percent to 89.954 billion rubles as the average realized gas price per 1,000 cubic meters rose by almost 19 percent to 1,628 rubles. Last year's gas output rose by more than 11 percent to 32.8 billion cubic meters.

Novatek shares closed up 0.4 percent on the MICEX, underperforming the broader MICEX oil and gas index, which rose 1.4 percent.

"We expect Novatek's share price performance in the coming months will be largely shaped by its ability to meet market expectations on production growth and gas price increases," Alexander Burgansky, a gas analyst at Renaissance Capital, said before the results were published. Both output and price "are being challenged by the increasing competitiveness of the domestic gas market."

Novatek produced 32.4 billion cubic meters of gas, a 6.3 percent increase from 2008, the company said. Liquids output rose 19 percent to 3.04 million tons.

Russia raised regulated domestic gas prices 14 percent last year in the main regions where Novatek delivers fuel, the company said. Novatek sells its gas at home and exports liquid fuels.

(Reuters, Bloomberg)