reported its 1Q09 results yesterday during the market. US GAAP net income came in at US$ 2,060m for 1Q09, down 19.7% y/y but up 165.8% q/q, 54.8% above the consensus forecast of US$ 1,331m (reported by Reuters) and 55.3% above our own forecast of US$ 1,326m. Better-than-expected bottom line is a combined effect of higher operating profits as well as lower-than-expected tax payments during the quarter. EBITDA posted US$ 2,299m in 1Q09, down 50.6% y/y and much above the previous quarter levels. We expect to see a positive market reaction to the results driven by better-than-expected figures, optimistic outlook of the management for the next quarters and rise in the crude oil price.
Revenues amounted to US$ 8.2bn, down 49.5% y/y and 23.5% q/q. The figure came 1.7% below the consensus forecast of US$ 8.4bn and 8.7% below our own forecast of US$ 9.05bn. Oil&gas sales went down by 51.8 y/y and 23.1% q/q to US$ 4.2bn due to further falling crude oil prices and sales volumes. crude oil sales wend 6.5% down quarter-on-quarter to MMBbl 98.2 mainly due to lower demand in Europe. Refined product sales declined by 25.4% q/q to US$ 3.77bn (-48.7% y/y) also burdened by lower product prices and selling volumes. was able to adjust its product sales portfolio for non-CIS countries increasing a share of gasoline and naphtha, which enabled the company to benefit from higher margins on these products.
costs amounted to US$ 6.95bn (-45.2% y/y and -40.6% q/q) 13.1% below our own forecast of US$ 8.0bn. One of the main reasons behind lower than expected costs was lower export duty payments after the actual export volumes were below our forecast. Also taxes other than income appeared to be below our forecast mainly due to lower-than-expected production volumes and lower effective MET rate. Weakening Rouble against the US Dollar resulted in sharp reduction of operating and general expenses, which pushed down controllable costs 35.1% q/q and 16.7% y/y. Since Rouble has strengthened QTD, we this positive impact to be reversed in the coming quarters. The same is true for taxes and export duties, which should increase in 2Q09 following the rise in crude oil quotes.
Financials came in at US$ 851.0m, up 85.4% q/q and versus a financial loss of US$ 410m in 1Q08. The actual figure came 39.6% above our forecast of US$ 610m. The company reported substantial decrease in interest expense from US$ 388m in 4Q08 to US$165m. Since the level of net debt remained broadly unchanged q/q at US$ 15.4bn, the main reason for lower interest cost was cut in LIBOR rates during 1Q09 as well as positive effect from interest swap operation. Additionally wrote off unclaimed promissory notes for which the statutory limitations expired in the first quarter of 2009 in the amount of US$ 141m.
Tax payment stood at US$ 127m only in 1Q09 versus a tax reversal booked in the fourth quarter and down 84.8% y/y. As a result effective tax rate stood at 5.7% only versus our expectation of 24%. According to the company, FX gain realized in 1Q09 was not a subject to tax, which decreased an actual amount of taxable income.
: US GAAP consolidated quarterly P&L
| |
|
|
|
|
|
|
| Total revenues |
16,368 |
10,799 |
9,048 |
8,264 |
-23.5% |
-49.5% |
| Oil and gas sales |
8,691 |
5,448 |
4,684 |
4,188 |
-23.1% |
-51.8% |
| Petr. prod. sales and proc. fees |
7,365 |
5,065 |
4,114 |
3,82 |
-24.6% |
-48.1% |
| Other |
312 |
286 |
250 |
256 |
-10.5% |
-17.9% |
| Total costs and expenses |
-12,664 |
-11,689 |
-7,995 |
-6,945 |
-40.6% |
-45.2% |
| Raw material costs |
-769 |
-560 |
-464 |
-295 |
-47.3% |
-61.6% |
| Production and operating expenses |
-1,02 |
-1,313 |
-882 |
-820 |
-37.5% |
-19.6% |
| General and administrative expenses |
-358 |
-468 |
-350 |
-310 |
-33.8% |
-13.4% |
| Pipeline tariffs and transportation costs |
-1,381 |
-1,409 |
-1,186 |
-1,252 |
-11.1% |
-9.3% |
| Exploration expenses |
-74 |
-84 |
-75 |
-80 |
-4.8% |
8.1% |
| Taxes other than income tax |
-3,59 |
-2,252 |
-1,687 |
-1,347 |
-40.2% |
-62.5% |
| Export customs duty |
-4,478 |
-4,681 |
-2,294 |
-1,842 |
-60.6% |
-58.9% |
| Other operating income/expenses |
-40 |
-20 |
-30 |
-19 |
-5.0% |
-52.5% |
| EBITDA |
4,658 |
12 |
2,08 |
2,299 |
19058.3% |
-50.6% |
| Depreciation and amortization |
-954 |
-902 |
-1,027 |
-980 |
8.6% |
2.7% |
| EBIT |
3,704 |
-890 |
1,053 |
1,319 |
n/a |
-64.4% |
| Financial result |
-410 |
459 |
610 |
851 |
85.4% |
n/a |
| Income from associates |
112 |
-213 |
50 |
42 |
n/a |
-62.5% |
| Pre-tax profit |
3,406 |
-644 |
1,712 |
2,212 |
n/a |
-35.1% |
| Income tax |
-836 |
1,458 |
-411 |
-127 |
n/a |
-84.8% |
| Minority interests |
-6 |
-39 |
25 |
-25 |
-35.9% |
316.7% |
| Net income |
2,564 |
775 |
1,326 |
2,06 |
165.8% |
-19.7% |
| |
|
|
|
|
|
|
| EPS (US$) |
0.27 |
0.08 |
0.00 |
0.21 |
165.8% |
-19.7% |
| EBIT margin (%) |
28.V |
0.1 |
11.VI |
27.VIII |
-64bp |
2,771bp |
Source: Rosneft, Bloomberg, KBC Securities