Russian largest oil producer Rosneft announced a huge decline in Q4 profits due to crude prices decrease and taxes and costs rise
According to The Moscow Times, oil producers have reported lower fourth-quarter earnings as the global economic slowdown saps demand for crude. The price of Urals blend fell 53 percent in the quarter from the previous three months, compared with a 38 percent decline in the export duty, Citigroup said in a note on Feb. 27. State-run Rosneft exports about half its output.
Rosneft's net income dropped to $775 million from $2.18 billion in the same period a year earlier, the company said Wednesday in an e-mailed statement.
Earnings before interest, taxes, depreciation and amortization, a measure of profitability, plunged to $32 million from $5.08 billion.
Taxes in the fourth quarter "were higher despite the oil price being 40 percent lower" than the same period the previous year, "primarily due to the export-duty lag," Peter O'Brien, Rosneft's vice president for finance and investments, said by telephone.
"If the exchange rate stays where it is through the end of the first quarter, we will have another material foreign exchange gain," O'Brien said. An unchanged ruble exchange rate will also lower costs in dollars on a U.S. generally accepted accounting principles basis, he said.
Author:
Ksenia Kochneva
