Rosneft first-quarter net falls 35% after oil prices slumped

STEPHEN BIERMAN

MOSCOW (Bloomberg) -- OAO Rosneft, Russia’s largest oil producer, said first-quarter profit fell 35% after last year’s drop in crude prices.

Net income dropped to 56 billion rubles ($1 billion) from 86 billion rubles a year earlier, the Moscow-based company said in a statement on its website. That was better than the average 36.5 billion-ruble estimate of nine analysts surveyed by Bloomberg.

The state-owned company has sought to cut costs while maintaining output as it repays debt piled up in the $55-billion acquisition of Russia’s third-largest oil producer, TNK-BP, in 2013. U.S. and European sanctions in response to Russia’s support for separatists in Ukraine have complicated Rosneft’s task by limiting its access to debt and equipment. That was compounded by a more than 50% slump in the average oil price in the first three months of 2015 compared with the year-earlier period, according to Rosneft.

Net debt fell to $43.3 billion in the quarter, the company said. Rosneft’s hydrocarbons output rose to 5.2 MMbpd from 5.09 MMbpd a year earlier.

Earnings before interest, taxes, depreciation and amortization decreased 8.3% to 265 billion rubles, which was higher than the 241 billion-ruble estimate of nine analysts. Sales declined 6.3% to 1.29 trillion rubles.

BP Plc holds almost 20% of Rosneft’s shares. Rosneft, almost 70% owned by the Russian government, announced changes to its accounting method for foreign-currency risk earlier this year.