×
Enjoying ad-free content?
Since July 1, 2024, we have disabled all ads to improve your reading experience.
This commitment costs us $10,000 a month. Your support can help us fill the gap.
Support us
Our journalism is banned in Russia. We need your help to keep providing you with the truth.

Rosneft Q2 Profits Rise Moderately

Rosneft said Friday that its second-quarter net income rose 10.8 percent year on year to $2.83 billion, below analysts' expectations, as rising tax bills offset soaring oil prices.

Rosneft's Moscow-traded shares declined further on the news and had shed 2.7 percent by 4:15 p.m. Moscow time Friday, when shares were already weak on the back of the U.S. debt woes.

Analysts polled by Reuters expected that net income would have risen to $3.06 billion.

In May the government canceled preferential export duty rates for Rosneft's Vankor oil field, the main source of growth in Russian oil production as older fields decline.

A Rosneft official said the cancellation of tax breaks cost the company $400 million during the quarter, while the effect of ruble appreciation was $200 million.

Rosneft also said the company produced a record daily volume of crude, 2.4 billion barrels per day, in July after an increase in capacity at Vankor.

It had also closed the deal to buy a 50 percent stake in Ruhl Oel, which owns stakes in four German refineries.

Revenues climbed 50.8 percent to $23.27 billion in April-June, above analysts' average forecast of $22.41 billion, while earnings before interest, taxes, depreciation and amortization rose 12 percent from the same period last year to $5.33 billion.

But EBITDA fell from the previous quarter's $6.65 billion, hurt by the cancellation of the export duty breaks and as the government hiked gasoline export duty to combat fuel shortages.

"We posted good results for the second quarter, including record operating figures. … EBITDA reduction quarter-on-quarter was anticipated following abolition of export duty for Vankor crude," Rosneft chief executive Eduard Khudainatov said in a statement.

The company also suffered from the state's efforts to cap gasoline prices and compulsory discounted fuel sales to farmers.

The Vankor field will also start paying full mineral extraction tax after it reaches cumulative production of 25 million tons next month.

… we have a small favor to ask. As you may have heard, The Moscow Times, an independent news source for over 30 years, has been unjustly branded as a "foreign agent" by the Russian government. This blatant attempt to silence our voice is a direct assault on the integrity of journalism and the values we hold dear.

We, the journalists of The Moscow Times, refuse to be silenced. Our commitment to providing accurate and unbiased reporting on Russia remains unshaken. But we need your help to continue our critical mission.

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 you can be confident that you're making a significant impact every month by supporting open, independent journalism. Thank you.

Once
Monthly
Annual
Continue
paiment methods
Not ready to support today?
Remind me later.

Read more