Rosneft, which is aiming for a 2 percent increase in output this year, said Thursday that lower oil prices reduced first quarter profit to $2.06 billion.
Russia's most indebted oil firm cut its net debt to $19.24 billion and has the right to draw on the first $10 billion of a Chinese loan to ensure that debt repayments are met this year and next, chief financial officer Peter O'Brien said.
Rosneft's first-quarter revenue fell 50 percent to $8.26 billion, while earnings before interest, taxation, depreciation and amortization dropped 51 percent to $2.32 billion, above the average forecast of $2.14 billion.
Rosneft, which acquired billions of dollars in debt while taking over the former assets of Yukos, reduced its borrowings thanks to strong cash-flow generation and a fall in the dollar value of its ruble-denominated debt.
While many Russian firms are struggling to restructure their debts, O'Brien said Rosneft was comfortable, having already repaid about a third of the $9.5 billion that matures this year. Rosneft cut operating expenses to $820 million in the first quarter from $1.02 billion a year earlier.
"The cost management was even better than we'd expected on the back of ruble depreciation," said Alex Fak, oil analyst at Troika Dialog brokerage.
In the second half of May, production reached a historical high of 2.14 million barrels per day. O'Brien said output would keep rising as a result of growth at the company's Yugansk unit and the launch of the huge Vankor field in the second half of the year.
A Message from The Moscow Times:
Dear readers,
We are facing unprecedented challenges. Russia's Prosecutor General's Office has designated The Moscow Times as an "undesirable" organization, criminalizing our work and putting our staff at risk of prosecution. This follows our earlier unjust labeling as a "foreign agent."
These actions are direct attempts to silence independent journalism in Russia. The authorities claim our work "discredits the decisions of the Russian leadership." We see things differently: we strive to provide accurate, unbiased reporting on Russia.
We, the journalists of The Moscow Times, refuse to be silenced. But to continue our work, we need your help.
Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just $2. It's quick to set up, and every contribution makes a significant impact.
By supporting The Moscow Times, you're defending open, independent journalism in the face of repression. Thank you for standing with us.
Remind me later.