Tuesday, May 18, 2010

Rosneft 1Q Net Profit Up 19% On Higher Prices, Output


By Jacob Gronholt-Pedersen Of DOW JONES NEWSWIRES MOSCOW (Dow Jones)--Russia's largest oil producer OAO Rosneft (ROSN.RS) Monday said first-quarter net profit rose 19%, helped by crude output growth and higher oil prices, but weighed by increasing transportation costs and a stronger ruble.

London-listed Rosneft said net profit under U.S. Generally Accepted Accounting Principles rose to $2.45 billion, from $2.05 billion in the first quarter of 2009, beating a poll of 10 analysts who had predicted $2.33 billion.

Revenue increased 79% to $14.76 billion from $8.26 billion a year earlier, boosted by a 8.4% year-on-year rise in oil output in the three months to 2.288 million barrels a day--primarily due to the launch of the huge Vankor field in August.

Market reaction was muted. At 1241 GMT, the company's GDRs were trading down 0.6% at $7.22 each in London, down from a one-year high of $9.3 reached Jan. 11.

Rosneft's stock more than doubled last year, but it lost close to a fifth of its value since a one-year high reached Jan. 11, after Russia's finance ministry proposed revoking a zero export duty on oil produced at some East Siberian oil fields, including Vankor.

"We don't expect any changes in the export duty in the near to medium term," Rosneft Chief Financial Officer Peter O'Brien told Dow Jones Newswires.

A working group, which includes ministries and oil producers, is considering keeping zero export duty for East Siberian oil this year, but applying a 60% discount to the normal export duty that applies to the company's other oil production starting from 2011, local media reported in March.

O'Brien believes any possible changes to the zero export duty on East Siberian oil in 2011 and 2012 will be be linked to broader tax reform.

Rosneft's earnings before interest, tax, depreciation and amortization, or Ebitda, totaled $4.44 billion in the period, up from $2.32 billion last time.

Company Web site: www.rosneft.com

-By Jacob Gronholt-Pedersen, Dow Jones Newswires; +7 495 232 9197; jacob.pedersen@dowjones.com

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