UPDATE: Lukoil 2Q Net Profit Slides 44% On Lower Prices
28 August 2009 - 7:32PM
Dow Jones News
Russia's second-biggest oil producer OAO Lukoil Holdings
(LKOH.RS) Friday said second-quarter net profit dropped 44% on the
year as oil prices fell, but beat expectations due to higher
downstream sales and output at the Yuzhnoye Khylchuyu field.
Lukoil, 20% owned by ConocoPhillips (COP), said net profit from
April to June under U.S. Generally Accepted Accounting Principles
fell to $2.32 billion from a net profit of $4.13 billion a year
earlier. The figure was considerably above a Dow Jones Newswires
poll of eight analysts, who had forecast $1.76 billion.
But this was more than double the net profit in the January to
March period as export duties lagged behind and oil prices
climbed.
"The results are definitely very strong," said analyst Oswald
Clint at Bernstein brokerage in London. He noted that the numbers
came in higher than expected due to greater sales in the downstream
segment, in particular at Lukoil's Italian ISAB refinery.
"I'm not sure if this trend is sustainable, as European
downstream netbacks are likely to decrease into the next quarter,"
Clint added.
Revenue was down 37% to $20.12 billion from $31.94 billion in
the same period last year, as oil prices fell but despite a 4.8%
rise in crude production in the quarter.
The increase in output came on the back of new production at the
Yuzhnoye Khylchuyu oil field, located in the Timan-Pechora region.
The field produced 1.7 million tons of crude oil - or almost
140,000 barrels a day - in the quarter.
Deutsche Bank said that Lukoil managed to beat expectations due
to higher output and better margins at the field. "It seems we
underestimated production at the Yuzhnoye Khylchuyu field," added
Deutsche Bank analyst Tatiana Kapustina.
Earnings before interests, taxes, depreciation and amortization,
or Ebitda, fell to $4.12 billion from $6.23 billion.
Since bottoming in mid-February, Lukoil's stock has gained more
than 70% this year.
At 0741 GMT, Lukoil's ADRs in London were trading up 3.3% at
$50.3 each, slightly down from a year high of $57.4 reached in
early June.
Company Web site: www.lukoil.com
-By Jacob Gronholt-Pedersen, Dow Jones Newswires; +7 495 937
8445; jacob.pedersen@dowjones.com