The company provides residential accommodation, on-site offices, catering, leisure, transport, warehousing and logistics support to all major companies involved in Kazakhstan’s oil and gas industry.
Net profits fell to US$0.8mln (US$1.9mln) in 2016, on revenues of US$20.3mln (US$23.5mln).
Rent fell to US$15.6mln (US$17.5mln), food sales to US$2.6mln 9US$3.5mln) and other income to US$2.1mln (US$2.5mln).
Svetlana Mendesh, Chief Financial Officer, said the results were in line with its projections and local market trends.
“Low oil prices, the devaluation of the national currency in the investments' region and difficulties with the implementation of major oil and gas projects have led to a reduction in projects and staff.
“However, the investments managers have enabled us to maintain strong EBITDA through conscientious cost control and continuous improvements in operating standards and business processes.”
Kazakhstan has major oil potential
Rich in natural resources, the country boasts some of the world’s largest oil fields, including the massive Kashagan discovery.
The field, in the Kazakh sector of the Caspian Sea, ranks as the largest commercial discovery in the last 40 years.
Like Kashagan, most of Kazakhstan’s major oil reserves and projects are found in the western part of the country, which is also the focus of Chagala’s development.
In seven years, oil production in the country has more than doubled to 1.71mln barrels per day in 2010.
By 2020, output from the country’s three major fields alone – Karachaganak and Tengiz fields and the off-shore Kashagan – is expected to grow to 3-3.5mln barrels per day.
Kazakhstan president Nursultan Nazarbayev has announced ambitious plans to double the country’s annual oil production to more than 1.2bn barrels, joining the world’s top five oil producers.
More immediately, Chagala is also involved in a court battle with a group of investors that has been ongoing for almost a year.
Originally seemingly a dispute over plans to raise more equity funds it has resulted in a claim against the company and three directors.
In the latest annual report, chairman Michael Carter gave this update.
“It was not an easy year – we faced a shareholder dispute related that has ended in litigation between one shareholder and the directors of the company.
“The outcome of the litigation is always uncertain, and depending on the outcome, the losing party could be required to pay an estimated two-thirds of the total incurred legal costs of the winning party, in addition to its own legal costs.”
The board acted in the best interest of all shareholders, he added.
"Despite the challenges we face and general global turbulence we are looking forward to 2017 and beyond with prudent optimism."