Rosneft IFRS net profit tumbles to 14 bln rubles in Q1
MOSCOW. June 8 (Interfax) - Rosneft saw its net profit to IFRS fall to 14 billion rubles in the first quarter of 2016 from 56 billion rubles in the same period of last year, the Russian oil major said.
The most accurate forecast for Rosneft's net profit was made by Aton, which projected a figure of 15 billion rubles.
Rosneft reduced its net debt by about 45% to 23.9 billion rubles. The company's free cash flow decreased by about 40% to 1.5 billion rubles.
Earnings before interest, taxes, depreciation and amortization (EBITDA) fell 14.4% to 273.3 billion, revenue fell 20.7% to 1.048 trillion rubles. Revenue fell "due to decreased crude oil prices by 13.2% in ruble terms," the company said.
"In Q1 2016 gas sales increased by 13% compared to Q4 2015 thanks to efficient management of contracts portfolio which compensated for negative effect from deteriorating market conditions," Rosneft said.
The company attributed the decline of EBITDA to "negative effects of external factors (crude oil price decline (110 billion rubles), higher tax burden effect (22 billion rubles)) which were not sufficiently offset by the ruble depreciation."
"In Q1 2016 net income was at 14 billion rubles. Decline of net income compared to 53 billion rubles in Q4 2015 resulted from EBITDA decrease, mentioned above, and from recognition of one-offs from insurance compensation and sales of investments in the total amount of 38 billion rubles in other income at the end of 2015," the statement said.
"In Q1 2016 lifting costs amounted to 155 rubles/barrels of oil equivalent ($2.1/boe ) which was lower than in Q4 2015 and Q1 2015," Rosneft said.
Rosneft's press office told Interfax the financial results of the world's largest oil companies, including Rosneft, were pressured by external factors, first of all, the oil price falling to its lowest level since the start of the crisis. The company said that transport tariffs and sector-specific taxes also had a negative influence on net profit. In January 2016 tariffs on services by Transneft on the transportation of crude oil via trunk pipelines were indexed by 5.76%, and tariffs on the transportation of oil products were increased to 12% on average, the company said.
In addition, the cost of services by Russian Railways on the transportation of goods and the use of infrastructure during transportation was indexed by 9%. Since January 2016, the base rate of the mineral extraction tax, MET, was increased from 766 rubles to 857 rubles. Moreover, the reduction of the coefficient of the cap on export duty on oil from 42% to 36%, planned previously as part of the tax maneuver, did not take place.
"It bears mentioning, that the figures on net profit may reflect the influence of momentary factors and one-off events, not connected with the usual operational activity of the reporting period. The net profit calculations include also the effects of a non-cash nature, which under no circumstances affect the financial stability of the company," the company said.
"The fall in Rosneft's net profit in Q1 was largely connected with the fact that the company is in an investment stage. The launch of a number of projects which will allow the company to ramp up production volumes and, in turn, guarantee profit growth, is planned only for the following reporting period," Rosneft said.
