The oil company reported a loss of over $ 150 billion and a decrease in key financial indicators. Nevertheless, quotes of Rosneft on the Moscow stock exchange rose
Photo: RBC Quote
In the first quarter of 2020, Rosneft recorded a net loss of ₽156 billion. The company presented its financial results on May 15 in its quarterly report. A year earlier, over the same period, the Russian oil producer showed a profit of ₽131 billion, and in the fourth quarter of 2020, the company earned ₽158 billion.
Rosneft attributed the quarterly loss to a weakening ruble and a revaluation of foreign currency liabilities.
Compared to the first quarter of 2019, operating profit fell 3.4 times, falling from ₽341 billion to ₽101 billion.
Despite the negative results, shares of Rosneft after the publication of the report went up. By 10:30 Moscow time, quotations of Rosneft on the Moscow Exchange rose by 1.5% – the value of shares rose to ₽352.4 apiece. Over the past 30 days, the company’s paper jumped by 14%, but at the same time remain much lower than the beginning of the year. In January, the stock was worth $ 480.
Rosneft quotes rose simultaneously with the growth of futures for a barrel of Brent. On the morning of May 15, the cost of the July Brent futures surpassed the $ 32 mark. This happened after an improvement in the forecast of the International Energy Agency for oil demand in 2020. In addition to Rosneft, shares of other Russian oil producers, in particular LUKOIL, Gazprom Neft and Bashneft, are growing on Friday.
Dynamics of Rosneft shares over the past 12 months
What else did the financial report for the first quarter of 2020 show
- Revenue decreased by 20.6% compared with the previous quarter and by 15% compared with the same period a year earlier to ₽1.7 trillion.
- EBITDA dropped to ₽309 billion, 36.7% compared with the previous quarter and 43.6% compared with the quarterly value a year earlier.
- Free cash flow for the quarter fell by 22.3% – from ₽282 billion to ₽219 billion.
Rosneft Executive Director Igor Sechin noted in a commentary on the report that, thanks to its ability to generate
free cash flow
the company continues to reduce its debt burden and channel funds to shareholders.
In April, the board of directors of Rosneft recommended paying dividends for the results of 2019 in the amount of ₽18.07 per share. Taking into account dividends for the first half of the year, the total amount of dividends per share will amount to ₽33.41. For these purposes, the company will direct 50% of net profit under IFRS for 2019.
Last month, Rosneft shares for the first time entered the top ten most popular securities among private investors on the Moscow Exchange. According to the results of April, the share of the oil company in the average portfolio amounted to 11.5%.
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Free cash flow – money in the accounts of the company that it earned during the period from its core business, net of taxes and capital expenditures. Free cash flow does not include receipts and payments of loans, purchase and sale of securities, etc.
Andrey Safronov, Alexey Mitrakov.