Rosneft Second-Quarter Profit Rises 60% on Higher Oil Production, Prices
The headquarters of OAO Rosneft stand in Moscow. Photographer: Alexander Zemlianichenko Jr/Bloomberg
OAO Rosneft, Russia’s largest oil producer, said second-quarter profit advanced 60 percent on higher oil prices and output.
Net income climbed to $2.56 billion from $1.59 billion in the same period the previous year, the Moscow-based company said today in an e-mailed statement. The company didn’t provide net attributable to shareholders, which was $1.61 billion a year earlier and was forecast to reach $2.64 billion, according to the average estimate of 10 analysts surveyed by Bloomberg News.
“Results were marginally positive,” Maria Radina, an oil and gas analyst at Nomura Holdings Inc., said by telephone from Moscow today. Earnings before interest, taxation, depreciation and amortization “could be stronger but Rosneft refining output was down due to maintenance works.”
The earnings, known as Ebitda, rose 33 percent to $4.75 billion, while sales increased 41 percent to $15.4 billion, Rosneft said.
Crude production rose 8.8 percent to 2.32 million barrels a day after the start of the Vankor and Verkhnechonsk fields, Rosneft said. The Vankor field at peak may provide the equivalent of 5 percent of Russia’s current output.
Refining Decline
Refining operations fell 7.5 percent compared with the previous quarter, with output at 11.2 million metric tons of petroleum products, the company said, without giving a year- earlier comparison.
The price of Urals blend, Russia’s benchmark crude export, rose 31 percent compared with the previous year to $76.66 a barrel, according to data compiled by Bloomberg.
Transportation costs in the first half gained 40 percent compared with the previous year to $3.5 billion because of rising state tariff.
“Cost increases have been continuing now for a number of years, well above inflation, and now are affecting upstream investment decisions,” Rosneft Vice President Peter O’Brien said today in a telephone interview. “Transit costs can be a straw breaking a camel’s back.”
Rosneft decreased net debt to $15.8 billion, or 15 percent less than at the end of the first quarter, on free cash flow of $2.8 billion, the Moscow-based company said.
“This is phenomenal,” Luis Saenz, London-based director of international sales at brokerage Otkritie Securities Ltd., said in an e-mailed note. Moscow-based Renaissance Capital had estimated net debt would decline to $17.5 billion.
Rosneft said capital expenditures reached $3.85 billion in the first half, 14 percent higher than a year earlier.
To contact the reporter on this story: Stephen Bierman in Moscow sbierman1@bloomberg.net.
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