By Alexander Kolyandr
MOSCOW--OAO Rosneft (ROSN.RS) expects to increase its output by
between 1% and 2% in 2013 mainly due to production growth at its
giant Vankor field in Siberia, the company said Friday as it
reported its 2102 full year earnings.
In a conference call Dmitry Avdeev, the vice president for
finance and economics, said he expects crude oil production from
Vankor to reach between 430,000 barrels and 440,000 barrels per
day, although he neither confirmed nor denied that oil production
at the company's other main fields could decline.
Vankor was the main contributor to Rosneft's oil output growth
of 2.5% to 2,43 million barrels a day in 2012 amid declining output
at the company's other main fields.
Higher output and higher oil prices led to a 13% rise in revenue
for the year to 3.08 trillion rubles ($102 billion) and a 7.2% rise
in net profit to RUB342 billion.
However, the profit figure fell well below market expectations.
"Reasons for such results are not exactly clear. There is an item
called 'other expenditures' which unfortunately the company does
not disclose," said Alexander Kornilov, an analyst with Alfa Bank,
who called the results "disappointing".
The market is also worried by a sharp drop in free cash flow,
which dropped to RUB45 billion for the full year from RUB99 billion
a year before, partly due to increased investment and lower income
from operations. Shares in the company closed down 2.1% RUB261.5 in
Moscow, underperforming the wider index which was flat on the
day.
Rosneft is buying competitor TNK-BP from BP PLC (BP) and its
partners in a deal worth $50 billion that will create the world's
largest traded oil producer. BP will increase its stake in Rosneft
to 19.8% as part of the deal.
Mr. Avdeev said antitrust bodies in Russia and Ukraine have
already approved the deal, and that the purchase, which is fully
funded, is going ahead as planned.
To finance the purchase of the stake from BP, Rosneft has agreed
to borrow $16.7 billion from international banks, the company said
in its earnings report.
Mr. Avdeev added that the oil giant may also place a Eurobond
later this year, as last year's debut issue showed "a very strong
demand". He added that the company would hit the international bond
market after considering the attraction of this instrument compared
to domestic bonds, direct loans, or contracts with trading
companies.
The company's net debt stood at RUB581 billion at the end of the
fourth quarter compared to RUB542 billion at the end of the
previous quarter, as Rosneft is yet to draw the agreed loans.
However, the acquisition of TNK-BP dented Rosneft's Earnings
before interest, taxation, depreciation and amortization, or
Ebitda, due to an increase in spending on audit and consulting
services.
The company's Ebitda margin, the measure used to judge a
company's profitability, dropped to 19.8% in 2012 from 24.4% in the
previous year.
Mr. Avdeev said the company is aiming at paying dividend at 25%
of its full-year profit, as announced before.
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