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UPDATE 1-Rosneft's Q2 net profit up on stronger rouble, beats forecasts

Fri, 25th Jul 2014 08:31

* Net income rose to 172 billion roubles thanks to rouble rise

* Rosnet's CEO says company works to offset sanctions effect (Adds detail, quote)

MOSCOW, July 25 (Reuters) - Russia's biggest oil producer Rosneft said its second quarter net income surged by almost five times year-on-year to 172 billion roubles ($4.9 billion), beating analyst forecasts, due to a stronger rouble.

Analysts, polled by Reuters, said the company, in which BP owns a 19.75 percent stake, had expected April-June net income at 161 billion roubles. Excluding the foreign exchange effect, net income increased by 88 percent year-on-year.

Rosneft's shares declined by 0.35 percent in early afternoon trade, outperforming a 1.1 percent decline of the broader Moscow market.

Kremlin-controlled Rosneft, which accounts for 40 percent of Russian oil production, was hit by sanctions from the United States over Moscow's actions in Ukraine, limiting the company's access to Western money.

The company is expected to comment on the sanctions and other topical issues, including the joint development of Russian offshore Arctic reserves with international majors such as ExxonMobil, during a conference call later today.

The head of Norways Statoil, with which Rosneft has plans to jointly develop Russia's Arctic offshore riches and hard-to-recover oil, said that it has been studying the sanctions that have been implemented, however, there has been no change in cooperation with the Kremlin-controlled company.

Rosneft's Chief Executive Officer Igor Sechin, a long-standing ally of President Vladimir Putin, said the company has been working on a plan to offset the negative effect from the punitive measures.

"Together with our partners - the world's leading oil companies - we are working on a plan to minimize the consequences of including Rosneft on the sanction lists," Sechin said in the statement.

Rosneft said its earnings before interest, taxation, depreciation and amortisation (EBITDA) rose to 304 billion roubles, almost in line with expectations.

Sales for the period rose to 1.44 trillion roubles, slightly above the 1.42 trillion roubles seen by analysts

The company also said that free cash flow was 112 billion roubles, which is three times higher than in the second quarter 2013, while net debt declined to 1.495 trillion roubles.

($1 = 35.0685 Russian Roubles) (Reporting by Vladimir Soldatkin, editing by Megan Davies and William Hardy)

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