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Thursday, March 05, 2009

Rosneft bottom line slides

03-04-2009 - Upstream OnLine - Russian producer Rosneft posted a 64.4% decline in fourth-quarter 2008 net profit due to a sharp fall in crude prices and a lag in the decline of price-related taxes. The $775 million profit beat a $270 million net loss forecast by analysts and included $956 million in deferred income tax benefits and $946 million of foreign exchange gains from the revaluation of rouble-denominated net liabilities. State-controlled Rosneft said full-year net profit rose 71.5% to a record $11.12 billion from a restated 2007 profit of $6.48 billion. Rosneft last year reported a 2007 net profit of $12.86 billion. The company said net income had been adjusted for the accrual of penalties and fines related to Yuganskneftegaz tax liabilities and Yukos bankruptcy proceeds. Rosneft said revenues fell 34.5% to $10.8 billion in the fourth quarter, beating analysts forecast of $10.5 billion. Full-year 2008 revenues rose 40.2% to $68.99 billion, slightly above the forecast $68.7 billion. Rosneft said in a statement it reduced its net debt last year by $4.99 billion to $21.28 billion. This year, it will have to repay about $7 billion. Chief financial officer Peter O'Brien told Reuters the company expected this year to draw down the first tranche of a $15 billion loan from China Development Bank, part of a $25 billion Chinese package in exchange for Russian oil supplies. "We expect by this summer to be able to draw on the first tranche," O'Brien said in a telephone interview. "It makes sense to use it for refinancing as existing debts come due over the next few years," he said. "In addition to that, we will consider potential investment opportunities." O'Brien said he expected a better first quarter of 2009. "If in the fourth quarter the export duty plus production tax plus transportation cost equalled 99% of the oil price, leaving nothing for expenses or capex, that number in the first quarter looks like it will be down to more normal levels of 60% to 65%," he said.

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