Oil Major Rosneft Says Q3 Net Profit Down 77%

Oil Major Rosneft Says Q3 Net Profit Down 77%
Russia's largest oil producer Rosneft says its Q3 net profit has fallen by 77% year-on-year.

Reuters

MOSCOW, Nov 11 (Reuters) - Russia's largest oil producer Rosneft said on Friday its third-quarter net profit had fallen by 77 percent, year-on-year, to 26 billion roubles ($400.7 million) due to weaker oil prices.

That was worse than expected. Analysts, polled by Reuters, had forecast net income to come in at 45 billion roubles.

"In Q3 2016 the environment on the commodity markets remained difficult. Additional pressure on the company's profitability was from (a) considerable negative export duty lag effect," Igor Sechin, Rosneft's chief executive, said in a statement.

Rosneft has been looking for ways to increase its global exposure and become a leading international oil major.

It said it had generated a positive free cash flow of $4.1 billion in January-September, pointing out that other majors had experienced a negative cash flow over the same period.

Rosneft bought a controlling stake in mid-sized oil firm Bashneft for 323 billion roubles last month, and has set its sights on acquiring a 19.5 percent state stake in itself.

Analysts say they want Rosneft to disclose its forecast for oil production and capex, as well as details on Bashneft and its own share buyback, during a conference call due later on Friday.

Kremlin-controlled Rosneft's shares rose by 0.3 percent at the opening of the trading session, underperforming a 0.4 percent rise in the broader Moscow stock market.

The company said sales had declined by 4 percent to 1.22 trillion roubles compared to the same period a year earlier, while earnings before interest, taxation, depreciation and amortization, a gauge of operating profit known as EBITDA, had increased by 20 percent to 292 billion roubles.

Free cash flow was $1.3 billion, unchanged from the previous three months.

Net debt rose by 11.5 percent to $26.1 billion from the previous quarter.

(Reporting by Vladimir Soldatkin; Editing by Andrew Osborn)

Copyright 2016 Thomson Reuters. Click for Restrictions.

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