MOSCOW - Russia's top oil producer Rosneft said Thursday that first-quarter net profit dropped 20 percent to $2.1 billion from the same period a year ago because of lower oil prices and weaker domestic demand.
That was down from $2.6 billion a year ago _ but up 65 percent from the fourth quarter, when state-controlled Rosneft was under pressure from a steep drop in oil prices and higher export duties, the company said in a statement.
Revenues in the first quarter of 2009 fell by 49.5 percent compared to a year ago to $8.3 billion. Rosneft’s earnings before interest, taxes depreciation and amortization, or EBITDA, dropped 50.7 percent, to $2.3 billion. EBITDA is sometimes used as a measure of a company’s basic business activity once financial items are stripped out.
Rosneft said it cut net debt by $2 billion to $19.2 due to “strong free cash flow generation.”
Crude production in the first quarter dropped 0.7 percent compared to year-ago to 2.1 billion barrels a day.
Oil prices fell from all-time highs of $147 per barrell in July to a trough around $35, but have since recovered to trade over $60 per barrel.
“In the first quarter, Rosneft demonstrated outstanding flexibility in managing costs and product flows, which drove net debt reduction of more than $2 billion despite a fall in the crude oil price of more than 50 percent compared to Q1 2008,” CEO Sergey Bogdanchikov said in a statement.
The results beat most analyst estimates.
Mikhail Zanozin, analyst at Moscow-based UralSib brokerage, said a steep drop in the ruble earlier this year and the subsequent rally made it hard to forecast the company’s future earnings.
“The company posted considerable profit due to a volatile ruble, which is also a reason why most forecasts missed the target,” he said. “Overall, the report is very good news both in terms of corporate governance and stock performance.”
Rosneft’s shares were up 4.6 percent on the MICEX stock exchange on Thursday afternoon.
