24 Mar 2010 10:33

Lukoil awaits two events on March 24 that could affect share prices

MOSCOW. March 24 (Interfax) - Lukoil will publish US GAAP financials for 2009 on March 24 and ConocoPhillips might on the same day announce it plans to sell 10% of Lukoil shares.

Lukoil will post a net profit of $2.1 billion for the fourth quarter of 2009 under US GAAP, according to the consensus forecast of 17 banks and investment companies compiled by Interfax. Lukoil posted a net loss of $1.6 billion in the fourth quarter of 2008. Net profit for the full year will total $7.4 billion, according to the forecast, 19% less than in 2008.

The analysts expect revenue to rise 31.3% in the fourth quarter year-on-year, but believe full-year revenue will decline 25.4% to $80.3 billion. EBITDA for the full year is forecast to decline 9.4% to $14.1 billion.

Company chief Vagit Alekperov said previously that Lukoil would post a net profit of about $7 billion in 2009 under US GAAP compared with $9.144 billion in 2008.

Lukoil is presenting its earnings report in London and will conduct a conference call with Vice President Leonid Fedun, Lukoil-West Siberia general director Azat Shamsuarov and Lukoil Overseas President Andrei Kuzyaev, and others.

Virtually at the same time as the Lukoil presentation is underway, ConocoPhillips CEO James Mulva may announce in New York that his company plans to sell 10% of Lukoil shares.

On Tuesday Lukoil chief Vagit Alekperov said the company is not planning to buy back its shares from ConocoPhillips in the event they are put up for sale.

The news sent Lukoil shares down 2%. As of 6:07 p.m. Lukoil shares were quoted at 1,650.5 rubles on MICEX, 2.3% below the close on Monday. On RTS Classica Lukoil declined 1.4% to $55.8 per share.

"ConocoPhillips has notified Lukoil that it wants to sell up to 10% of shares in the company. We have the right of first refusal, but I don't see the need for that at the moment," he said.

ConocoPhillips might sell the shares on the market in very small lots, he said.

"ConocoPhillips needs money to support itself and this [the Lukoil shares] is their most viable asset," he said.

Alekperov doubts the sale would depress Lukoil stock prices. "No one wants to see that: They don't [ConocoPhillips], and our shareholders don't either. Therefore the sale will be carried out very carefully," Alekperov said.

Commenting on whether he plans to increase his own stake in Lukoil, Alekperov said: "I always buy."

In October 2009 ConocoPhillips said that it would sell a portion of assets over the next two years totaling $10 billion. Analysts noted that the list of assets might include its 20% stake in Lukoil. Alekperov has said the American company does not plan to sell the stake. "I met with the president of ConocoPhillips, and we discussed these issues. ConocoPhillips has a program to cut costs and to sell assets that they do not consider strategic. Our stake has not been considered for sale by either the board of directors or management," he said.

When asked on March 17 whether Lukoil had decided which ConocoPhillips assets it might buy, Alekperov said: "So far, no." He added that there were no plans for a share buyback.

Meanwhile, Lukoil board chairman Valery Graifer told journalists that the Lukoil shares ought to be purchased back from ConocoPhillips.

Lukoil managers own a combined 32.66% of Lukoil shares, according to a memorandum prepared for a placement of Eurobonds in October 2009.

According to that document, Alekperov owned 20.599% of Lukoil shares (up from 20.54% the previous year) Vice President Leonid Fedun had 9.247% (9.21%), board member Nikolai Tsvetkov had 1.032%, First Executive Vice President Ravil Maganov had 0.486%, board member Sergei Mikhailov had 0.05% and board chairman Valery Graifer had 0.007%.