You are here: Home » Reuters » News
Business Standard

Higher oil price and output boost Rosneft, despite charges

Reuters  |  MOSCOW 

By Vladimir Soldatkin

(Reuters) - Russia's largest producer almost tripled third-quarter net profit to 142 billion roubles ($2.2 billion), as higher crude output and prices outweighed impairments on downstream operations.

The state-controlled company took a 133 billion rouble charge on refining and distribution operations. Russian fuel prices have lagged a surge in crude prices, and companies have also been forced by the government to cap politically sensitive

Despite the big profit jump from the same period last year, fell just short of analysts' expectations. Their average forecast in a poll was 147 billion roubles.

Rosneft, which includes and among its shareholders, accounts for about 40 percent of Russia's output and is key to Moscow's efforts to forge closer ties with the Organization of the Petroleum Exporting Countries (OPEC).

The company increased in the third quarter by 3.4 percent year on year.

A told a conference call that planned to raise its liquid hydrocarbon production further next year, to 241 million tonnes, or million barrels per day (bpd), up from 4.73 million bpd in the third quarter.

The company also said it expected capital expenditure to rise by 20-25 percent in 2019 from around 900 billion roubles seen this year, due to the development of new upstream projects.

Rosneft's shares were 5 percent higher in afternoon trade.

DEBTS

Headed by Igor Sechin, a long-standing ally of Russian Vladimir Putin, Rosneft has been pursuing acquisitions at home and abroad, amassing huge debts.

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

The company did not disclose its latest net debt figure, but analysts at brokerage BCS put it at $71.7 billion, down about 8 percent from the previous quarter.

After the introduction of sanctions that shut the company out of Western capital markets, Rosneft switched to prepayment deals with international traders such as Trafigura.

The company said it was owed $3.1 billion by as of Sept. 30, down from $3.6 billion on June 30. It also said it owed $26.8 billion to traders under prepayment deals for its oil as of Sept. 30, down from $29.3 billion at June 30.

($1 = 65.9829 roubles)

(Reporting by Vladimir Soldatkin; Additional reporting by Olesya Astakhova and Oksana Kobzeva; Editing by and Mark Potter)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, November 06 2018. 20:18 IST
RECOMMENDED FOR YOU