Russia's Rosneft more than triples second-quarter net profit, shares hit record

By Olesya Astakhova and Diana Asonova

MOSCOW (Reuters) - Russia's largest oil producer Rosneft said on Tuesday its second-quarter net profit more than tripled to 228 billion roubles ($3.6 billion) on higher production and prices, pushing its shares to an all-time peak.

Rosneft, in which Qatar is set to become the third-largest shareholder after the Russian state and BP, said its profit was also supported by a one-off gain from a share acquisition in an upstream joint venture and the revaluation of a stake in another joint venture.

Headed by Igor Sechin, a close ally of Russian President Vladimir Putin, Rosneft said its revenue in the second quarter was 2.07 trillion roubles, up 48 percent year-on-year.

Earnings before interest, tax, depreciation and amortisation (EBITDA) were 565 billion roubles, up 85 percent.

"The second quarter was mainly a reflection of the management's efforts to improve the efficiency of the company," Sechin said in a statement.

Under Sechin, who took over the company in 2012, Rosneft has made huge acquisitions in Russia and abroad, including the $55 billion takeover of local peer TNK-BP in 2013. That deal made Rosneft the world's biggest listed oil firm by output.

"The key strategic acquisitions made in the period of low oil prices have been completed. The company is focusing on organic growth and the monetisation of synergies from the acquisitions," Sechin said.

According to the Aton brokerage, Rosneft's net debt, excluding prepayments for oil supplies, was 3.3 trillion roubles at the end of the second quarter, equivalent to 1.8 times net debt/EBITDA.

That was 101 billion roubles less than the first quarter.

In May, Rosneft announced a plan to cut its debt and trading liabilities by a minimum of 500 billion roubles this year, partly by selling non-core assets.

"We are actively working on the initiatives we set to enhance shareholders' returns. In the first half-year, the company more than halved its short-term financial liabilities," Sechin said on Tuesday.

"The management is continuing to work intensively with the intention of meeting the goals set for the year."

Rosneft also said on Tuesday that Venezuela owed it $3.6 billion in the second quarter of this year, down from $4 billion at the end of the previous quarter.

On Monday, Rosneft said its daily liquids production in the second quarter rose 0.8 percent year-on-year to 4.6 million barrels and that it had the capacity to raise third-quarter oil production by 200,000 barrels per day (bpd).

OUTPUT SEEN HIGHER

The firm added on Tuesday that by the end of 2018 it would be able to raise oil output by 250,000 bpd from a quota level agreed as part of an oil production deal between OPEC and non-OPEC countries.

It said it planned to put its new Russkoye oilfield in the northern Yamal Nenets region onstream by the end of the year.

Russian Energy Minister Alexander Novak said last month Russia planned to increase its production by 200,000-250,000 bpd in July.

Following an initial deal in 2016 between OPEC and non-OPEC producers to curb oil output, Rosneft said it could delay the start of production at some new fields, including eastern Siberia's Uyrubcheno-Tokhomskoye and Russkoye.

Rosneft also said on Monday that its board of directors had approved the structure and parameters of a share buyback programme worth up to $2 billion.

The programme would run until the end of 2020 and Rosneft said it may partially cancel its treasury shares if needed. The maximum amount of shares and depositary receipts to be repurchased would not exceed 340 million shares, it said.

Rosneft Chief Financial Officer Pavel Fyodorov said on a conference call the firm was considering using the share price on April 10-11 as a potential target for its buyback programme.

Rosneft shares were trading at 309 roubles on April 10 and at 324 roubles on April 11.

Rosneft said on Tuesday that its first-half dividend might be higher than its 2017 full-year payout. That, together with strong results and the earlier approved buyback, pushed its shares to an all-time high of 425.5 roubles apiece on Tuesday.

($1 = 63.4900 roubles)

(Reporting by Olesya Astakhova; writing by Tom Balmforth, Katya Golubkova and Denis Pinchuk; Editing by Jason Neely and Dale Hudson)