Rosneft's Revenues Increase by 78.6%
Rosneft published its consolidated financial results under US GAAP for Q1 2010.
In Q1 2010, Rosneft's revenues increased by 78.6% year-on-year, to USD 14,761 mln. The increase was due to higher crude oil and petroleum product prices as well as due to the growth of crude oil production and refinery throughput by 8.4% and 4.1%, respectively.
Rosneft's EBITDA amounted to USD 4,443 mln in Q1 2010, which is almost double the Q1 2009 level. The increase was tempered by the real strengthening of the ruble against the USD, higher tax payments and growth of transportation costs, substantially exceeding CPI.
In Q1 2010, Rosneft's net income amounted to USD 2,447 mln, up 19.4% compared with USD 2,050 mln in Q1 2009. The lower growth rate of net income compared with those of revenues and EBITDA was due to the considerable foreign exchange gain and low income tax rate in Q1 2009. Decrease of net income expense as a result of reduction and optimization of Rosneft's net debt had a positive impact on the Company's net income.
In 2010, Rosneft continued reduction of its net debt. As of April 30, 2010 it amounted to USD 16.4 bln, which is a decrease of USD 2.1 bln since December 31, 2009 and more than USD 11 bln since September 30, 2007.
In Q1 2010, Rosneft's average daily crude oil output (including production by subsidiaries and share in production by affiliates) increased by 8.4% year-on-year, to 2,288 th. barrels per day (bpd). The Company's Vankor field, officially launched in August 2009, was the main growth driver. Daily crude oil production at the field averaged 259 th. bpd in April 2010 and reached 264 th. bpd in the middle of May 2010.
Petroleum product output by Rosneft was 12.1 mln tonnes in Q1 2010, up 4.0% year-on-year and 2.2% quarter-on-quarter.
In Q1 2010, Rosneft continued implementation of cost optimization measures. Upstream operating expenses were USD 2.69 per bbl, or 2.2% lower quarter-on-quarter, which exceeds the nominal depreciation of the ruble against the USD. Operating expenses of the Company’s refineries were USD 10.4 per tonne, which is a decrease of 21.5% quarter-on-quarter. The decrease was due to cost cutting initiatives and lower volumes of planned maintenance works compared with Q4 2009. Rosneft's general and administrative expenses were USD 370 mln in Q1 2010, or 5.6% lower quarter-on-quarter.
The Company's success in cost cutting was muted by increases in transportation costs and tax payments. In Q1 2010, transportation costs increased by USD 512 mln year-on-year, to USD 1,764 mln due to the increase in transportation tariffs in the middle of 2009 and beginning of 2010. Export duties amounted to USD 3,984 mln, which is USD 2,142 mln higher year-on-year, and mineral extraction tax payments were USD 2,128 mln, or USD 1,142 mln more than in Q1 2009.
Commenting on the results, Rosneft's President Sergey Bogdanchikov said, "Our main achievements in Q1 2010 were high rates of crude oil production and refinery throughput growth, as well as continued successful cost control. Currently, the Company's main priority is ongoing implementation of the key investment projects, including continued development of the Vankor field to reach the targeted production level by 2014 as well as modernization of refining capacities."
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