Message from the Chairman of the Management Board
Dear shareholders, investors, colleagues and partners,
The Company’s annual report is a report on its sustainability progress. Confirming our commitment in this direction, we continue to implement our strategic goals that meet both the interests of our shareholders and investors, employees and partners, residents in the regions where we operate, and Kazakhstan as a whole. Striving to improve the Company’s ESG performance year on year remains at the centre of our focus.
We are consistently implementing the Strategic Goal ‘Sustainable Development and Gradual Carbon Emission Reduction’. In support of this goal, KMG has approved the 2022–2031 Low-Carbon Development Programme. The Company aims to implement state-of-the-art conservation technologies and reduce its carbon footprint to contribute to the global fight against climate change.
We are actively working to reduce greenhouse gas emissions and implement joint projects in the field of renewable energy. We have started developing design documentation for the construction of the 1 GW Mirny Wind Plant with Total Eren. This year we plan to start construction of the Hybrid Power Plant with Eni S.p.A. These activities demonstrate our determination in moving forward with sustainable development and creating an efficient, clean energy infrastructure.
In line with our principles, we pay special attention to the implementation of environmental activities to minimise our environmental impact. There is a positive trend in a number of environmental indicators: the share of raw gas utilisation reached 98.9 %, and the volume of historical waste utilised increased to 1,145,000 tonnes. We take actions to reduce atmospheric emissions and improve the efficiency of water management.
Taking care of our employees is an important aspect of our activities. At the end of 2023, the Company had 49 thousand employees. Under the Strategic Partnership Agreement between KMG and Abu Dhabi Ports (ADP), an initiative to employ Kazakhstani specialists from Mangistau and Turkestan Regions in ADP was implemented.
KMG Group has 42 trade unions that protect the interests of employees. Meetings are held between the management and SDE trade unions on a quarterly basis to address the most pressing issues. To improve labour and recreation conditions for employees, work is done to build new and overhaul existing social infrastructure facilities.
Along with this, we pay attention to the development of the regions where we operate and to the charity. More than KZT 5 bln has been allocated for the implementation of social projects under subsoil use contracts. Under the Zharkyn Bolashak Project, KMG allocated KZT 678 mln for educational grants to 449 high school students in Mangistau Region. Children are provided with full non-gratuitous financial assistance, which includes education, dormitory accommodation and transport costs, as well as monthly scholarship allowances.
In 2023, KMG Group launched the KMG-Volunteer Movement. Our volunteers actively contribute by helping those in need, as well as supporting social and environmental initiatives.
The most important priority in our activities is to ensure a high level of occupational health and safety. In the reporting period, the number of people injured in occupational accidents decreased by 19 % year-on-year. At the same time, despite the reduction in occupational injuries, there were fatal accidents among employees of KMG Group and contractors. We are taking systematic measures to enhance safety and prevent such accidents.
Continuing the implementation of investment and infrastructure projects, thanks to the Enhanced Model Contract mechanism, we have managed to intensify work on the complex and capital-intensive Kalamkas Sea – Khazar, Karaton Subsalt and Urikhtau Projects.
In the reporting year, the Company demonstrated positive dynamics of its production performance. Despite the reduction in the average price of Brent crude oil, net profit for the reporting period amounted to KZT 924 bln. KMG paid KZT 1,162 billion in taxes and other obligatory payments to the budget. The total amount of goods, works and services supplied to KMG Group was KZT 2,186 bln, which is almost twice as much as last year’s figure. The local content share in our procurement also increased and amounted to 77 %.
I would like to emphasise that it is important for us to achieve production and financial stability, while taking into account social and environmental aspects in our activities. We are confident that only in this way can we ensure stable and sustainable development of our Company in the future.
During 2023, Sustainability Initiatives were actively discussed internationally. The issues of environment and climate change, human rights and labour relations, gender equality and anti-corruption were priorities at international meetings, such as COP28, UN Global Compact and others. Our Company actively participates in these events, and we aim for annual sustainability progress of the Company in all respects.
We meet the requirements of the time, creating a sustainable and responsible business for the long term, embedding our ESG Code into every business process. In the future, this will lead to improved performance in all areas of KMG’s operations and to financial stability.
Thank you for your attention and trust in our Company.
