30 Jul 2009 14:30

Russian oil companies not expected to pay generous dividends in 2009

MOSCOW. July 30 (Interfax) - Generous dividends should not be expected from Russian oil companies for 2009 due to a sharp decline in earnings in the first half of the year, Uralsib analysts Viktor Mishnyakov and Mikhail Zanozin said in a report.

Five Russian oil and gas companies announced low net profit figures for the first half of 2009 this week.

"Rosneft had net profit of 81.3 billion rubles ($2.5 billion) in the first half of 2009, down almost 50% from the same period of last year. Gazprom Neft announced net profit of 26.4 billion rubles ($798 million), down 57% from a year earlier. Lukoil net profit was down 27% to 37.5 billion rubles ($1.1 billion). Slavneft posted net losses of 223 million rubles ($8.9 million) versus profit of 6.5 billion rubles ($271 million) last year. NOVATEK's net profit fell 24% to 6.8 billion rubles ($211 million) compared to the first half of 2008. The companies released unconsolidated net profit figures under Russian accounting standards, however they are interesting from the point of view of dividend payments," the report says.

The analysts noted that, under Russian law, dividends are paid by the parent companies of vertically integrated oil companies based on Russian accounting standards. Thus, the decline in net profit in the first half of 2009 means that oil companies will not pay generous dividends for 2009, they said.