March 19, 2018 / 9:36 AM / in a month

Rosneft doubles fourth-quarter profit helped by Sistema deal

MOSCOW (Reuters) - Rosneft (ROSN.MM) doubled its fourth-quarter net income to 100 billion rubles ($1.74 billion) after it resolved a row with Sistema (AFKS.MM), the Russian energy company said on Monday.

The shadow of a worker is seen next to the logo of Russia's Rosneft oil company at the central processing facility of the Rosneft-owned Priobskoye oil field outside the city of Nefteyugansk, Russia, August 4, 2016. REUTERS/Sergei Karpukhin/File Photo

The net income met analysts’ forecasts.

Sistema agreed to pay 100 billion rubles to Rosneft as part of an out-of-court settlement over oil producer Bashneft (BANE.MM).

Rosneft said the deal added 48 billion rubles to its 2017 net income. Sistema said this month that it had completed all payments to Rosneft.

Rosneft’s shares were up by 0.7 percent as of 0906 GMT versus Moscow’s stock market .MCX which was down 0.4 percent.

NET DEBT NOT STATED AGAIN

Rosneft, headed by Igor Sechin, a close ally of President Vladimir Putin, has been expanding aggressively, investing billions of dollars in foreign assets.

It said on Monday in 2017 it had transferred $2.1 billion to the Iraqi Kurdistan government as prepayments for future oil supplies, and $1 billion to Venezuela’s PDVSA last April as part of an oil supply deal.

    Moscow-based brokerage Aton said in a note that net debt has not materially changed since the previous financial report, valuing it at 3.509 trillion rubles ($61 billion).

    “Rosneft is still the most leveraged oil company in Russia, and its deleveraging is perhaps investors’ greatest hope with respect to its investment case,” it said.

    The company did not report its net debt in the latest report. The most recent estimate published by Rosneft was 2.216 trillion rubles ($38 billion) excluding prepayments to foreign firms as of June 30, 2017.

    Rosneft has prepayment and long-term supply deals with Vitol [VITOLV.UL], Glencore (GLEN.L), Shell (RDSa.L), Total (TOTF.PA), Eni (ENI.MI), BP (BP.L) and Trafigura [TRAFGF.UL]. It also has similar deals with China.

    On Monday, Rosneft said its fourth-quarter liquid hydrocarbon production - largest among listed global oil producers - reached 56.51 million tonnes, raising its full-year output by 7.3 percent to 225.5 million tonnes, or 4.53 million barrels per day.

    BP (BP.L), which owns a 19.75 percent stake in Rosneft, sources a third of its oil in Russia.

    Rosneft’s fourth-quarter earnings before interest, taxes, depreciation and amortization (EBITDA) rose almost 8 percent to 393 billion rubles on revenue of 1.7 trillion rubles, up more than 14 percent.

    ($1 = 57.5700 rubles)

    Reporting by Vladimir Soldatkin and Olesya Astakhova; editing by Katya Golubkova and Jason Neely

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