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Rosneft Posts 2Q Profit But Ebitda Plunged on Weak Production, Prices — Update

--Rosneft swung to profit in 2Q but Ebitda nearly halved

--The oil major's hydrocarbon output fell in the quarter due to OPEC+ agreement, while pandemic weighed on prices

--Capital expenditure for 1H was reduced from a year ago

 

By Jaime Llinares Taboada

 

Rosneft Oil Co. on Friday posted a profit for the second quarter but lower oil production and prices hit underlying performance.

The Russian oil-and-gas company recorded a net profit of 43 billion rubles ($589.9 million) for the three months ended June 30, compared with a RUB156 billion loss in the first quarter of 2020.

Earnings before interest, taxes, depreciation and amortization plunged 45% to RUB170 billion, as the company had to cut production due to the new OPEC+ agreement.

Rosneft's hydrocarbon production declined 12.2% quarter-on-quarter to 5.05 million barrels of oil equivalent per day. As a result, the company saw sales decline 22% for crude oil, 14% for petroleum products, 17% for petrochemicals and 12% for gas.

In addition, dollar-denominated realized oil prices fell 35% quarter-on-quarter as the pandemic hit energy demand.

The group also reduced investments, blaming negative market conditions and the new OPEC+ agreement which is aimed at cutting oil supply. Capital expenditure totaled RUB367 billion over the first half of the year, down 16% from the same period of 2019, Rosneft said.

However, Chief Executive Igor Sechin said prices for crude and refined products have improved, which he expects will support a recovery in the company's future performance.

Shares in London at 0844 GMT were down $0.05, or 0.9%, at $5.21.

 

Write to Jaime Llinares Taboada at jaime.llinares@wsj.com; @JaimeLlinaresT

 

(END) Dow Jones Newswires

August 14, 2020 05:03 ET (09:03 GMT)

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