Qatar Gas Transport Company (Nakilat) has announced a total profit in the first half of 2012 of QR 385.4 Million compared with QR 379.5 Million for the corresponding period in 2011. The company reported a net profit for H1 2012, after loss on derivative instruments from a joint venture, of QR 380.8 Million compared with QR 381.4 Million for H1-2011 after a gain on derivative instrument from a joint venture. The loss on derivative instruments of QR4.6 Million for the first half of 2012, compared with a gain on derivative instruments of QR 1.9 million for H1-2011, was due to a technical disqualification (for accounting purposes) of the applicable derivatives (carried in the books of the company's overseas joint venture) as hedging instruments in accordance with International Accounting Standard 39, Nakilat said in a media statement. The change in the accounting treatment is only a non-cash accounting transaction and does not affect the economics of the derivative transactions nor the cash flows or liquidity of the company. Nakilat and its joint ventures are exposed to interest rate risks on borrowed funds. The risks are managed by the use of interest rate swap contracts, which will protect the company from increases in interest rates in the future. The majority of Nakilat and its joint ventures borrowings were obtained at the time the company's time charter party agreements were signed with our charterers, the company added.