Russian Lukoil Sees Profits Up

Russian independent Lukoil’s first quarter profit totaled rubles 149.2bn ($2.3bn), up 36.8% year-on-year, but down 6.2% on 4Q 2018 owing to lower prices and traded volume, it said May 29.

Year-on-year growth was limited by higher depreciation, depletion, and amortisation (DD&A) with the launch of new production facilities. “The quarter-on-quarter decline is also due to higher DD&A following its reduction in the fourth quarter of 2018 driven by one-off upward revision of the proved developed reserves,” it said. The company announced May 13 that it increased gas production by 12% year-on-year to 9bn m³ in the first quarter of 2019 thanks to rising Uzbek output.

Its quarterly sales amounted to rubles 1,850.9bn, or 13.5% higher year-on-year, mainly owing to the weaker ruble and higher volumes of oil and gas sales outside Russia driven by higher production volumes along with increase in crude oil trading volumes.

Sales decreased by 9.4% mainly due to lower hydrocarbon prices and reduction in crude oil and refined products trading volumes, it said. Despite lower sales, Lukoil’s earnings before interest, taxes, depreciation and amortization (EBITDA) in the first quarter of 2019 amounted to rubles 298.1bn, up 35.8% year-on-year and 7.1% quarter-on-quarter.

The company’s capital expenditures also stood at rubles 97.4bn, which is 14% lower quarter-on-quarter and 19.5% lower year-on-year mainly due to the payment schedule to suppliers and contractors, as well as external limitations on oil production in Russia.