Rosneft Revenue for 2024 Up 10.7 Percent on Higher Urals Prices

Rosneft Oil Co. has reported RUB 10.14 trillion ($120.68 billion) in revenue for 2024, up 10.7 percent from 2023 on higher Urals prices.

It produced 3.74 million a day of liquid hydrocarbons last year, kept within Russia’s compliance with caps by the Organization of the Petroleum Exporting Countries Plus alliance, Rosneft said in an online statement. Gas output averaged 1.46 million barrels of oil equivalent per day.

The majority state-owned integrated oil and gas company’s contribution to Russia’s budget also rose to a record. Rosneft, Russia’s biggest taxpayer, remitted over RUB 6.1 trillion to the government, the highest ever by a Russian taxpayer, chair and chief executive Igor Sechin said in comments for Rosneft’s annual results.

The increase in prices comes despite a cap imposed by the Group of Seven, including the European Union, and Australia since December 2022 as part of efforts to deprive Russia of funds that it could use in the war in Ukraine.

Sechin had played down the impact of Western pressure on Russia’s economy.

“[T]he West initially overestimated the effectiveness of its pressure on the strong potential of our countries' economies”, Sechin told the Russia-China Energy Business Forum last year, as quoted in a Rosneft press release July 23, 2024. “Last year, for example, the IMF raised its forecast for Russia's GDP growth four times. Russia's GDP growth at the end of the year exceeded initial expectations by almost 6 percentage points”.

Rosneft’s net profit for 2024, however, fell 14.4 percent year-on-year to RUB 1.08 trillion, with Sechin ruing about high tax rates and tight monetary policy.

“The net income attributable to the Company's shareholders is lower as compared to the previous year due to the impact of non-cash factors, the main one being the revaluation of tax liabilities due to the income tax rate increase to 25 percent from 2025”, Sechin said. “In accordance with IFRS [International Financial Reporting Standards] requirements, this resulted in a restatement of deferred tax with a negative income effect of RUB 0.24 trillion.

“However, efficient execution and improved development parameters of a number of our key projects afforded an opportunity to dramatically reduce the negative effect of these changes.

“The sizable key rate increase exerted additional pressure on the net income. In particular, the Company's interest expenses on loans and borrowings increased 1.5 times in 2024. I should note that the Bank of Russia maintains a very high real interest rate in the economy: in the last two years, it has been the highest in the world”.

Earnings before interest, taxes, depreciation and amortization (EBITDA) came at RUB 3.03 trillion for 2024 with an EBITDA margin of 29.7 percent. Capital expenditure rose 11.2 percent year-over-year to RUB 1.44 trillion. Free cash flow landed at RUB 1.3 trillion.

“The net debt / EBITDA ratio at the end of 2024 remained unchanged in comparison with the end of Q3 2024 [third quarter], amounting to 1.2x, despite new negative macroeconomic factors”, Rosneft said.

It paid an interim dividend of RUB 36.47 per share last month. “The dividend base has remained unchanged since the 2011 dividend, which ensures transparency and predictability of the dividend amount”, Sechin said. “I am pleased to note that in the last year alone the number of our shareholders increased by almost a third and reached 1.5 million people”.

To contact the author, email jov.onsat@rigzone.com