Rosneft earnings beat expectations on rising prices
Russia's largest oil company Rosneft on Thursday handily beat analysts' expectations by reporting a 58.2 percent jump in quarterly profits that it attributed to rising energy prices and sales.
The state-held giant reported Q1 2011 net income of $3.942 billion and a jump in EBIDTA earnings -- a pre-deductions indicator closely watched by analysts and investors -- of 49.7 percent to $6.653 billion.
"The price environment on the international market was very supportive in the first quarter, allowing us to achieve record high financial results," Rosneft President Eduard Khudainatov said in a statement.
"Strict cost control and further optimisation of business processes remained our priorities in the quarter and made their contribution to the growth rates. We also achieved further progress in upgrading our refining capacities."
Both figures easily beat market expectations.
The Metropol investment bank said in a research note that it expected Rosneft net income to rise 26 percent and the EBIDTA figure 21 percent.
The company said it managed the impressive figures despite new-found ruble strength that washed away the impact of the dollar-denominated sales and a new wave of higher state sales and transport tariffs.
Rosneft said its oil output had increased 2.9 percent in year-on-year figures -- a figure that is two percent higher the company's own forecasts -- while sales volumes grew by a strong 4.9 percent.
It also attributed some of the gains to its executives' ability to slash administrative and refining costs.
Yet the company statement provided no outlook for the upcoming months and made no mention of the TNK-BP controversy most frequently associated with its name in recent weeks.
Russia's most important oil company has been embroiled in heated controversy as it seeks to complete a share-swap and joint Arctic exploration agreement with the British giant BP that has been hung up in the courts.
The Russian shareholders of TNK-BP -- the British firm's local venture -- are trying to put a halt to the deal and take their parent company's place.
Rosneft and BP are now up against an extended May 16 deadline for the deal to close.
© 2011 AFP