MOSCOW – Russia’s largest oil company Rosneft said on Wednesday that its net income attributable to shareholders amounted to 708 billion rubles (over $11 billion) in 2019, a 29 percent increase as compared to the previous year, the company said on Wednesday.
The company said the increase was mainly due to positive dynamics in its operating result and a reduction of financial expenses and other costs.
Last year, the oil firm, controlled by the Russian government, invoiced 8.7 trillion rubles, marking a 5.3 percent increase from 2018.
Rosneft revenues were mainly driven by higher volumes sold – an increase of 20.1 percent – in an environment where the company suffered a 6.2 percent reduction in crude oil prices, the company explained.
The gross operating profit of the oil company amounted to 2.1 trillion rubles in 2019, an increase of 1.2 percent.
This was due to a higher volume of sales to the east – up 34.6 percent –, as well as effective control over costs, according to Rosneft.
During the first nine months of last year, Rosneft reduced free cash flow by 22 percent to 884 billion rubles, while cutting down capital expenditure by 8.8 percent to 845 billion rubles.
Rosneft chief Igor Sechin said the firm in 2019 operated under several negative factors and uncertainties in the market, such as restrictions on the injection of oil into the Russian network of pipelines managed by Transneft, and the regulation of prices for petroleum products early in the year, which put added pressure on financial results.
“The Russian economy has been negatively impacted by sanctions imposed on Russia by a number of countries. Ruble interest rates remained high. The combination of the above has resulted in reduced access to capital, a higher cost of capital and uncertainty regarding economic growth,” Rosneft said in a statement.
Besides, the agreement to reduce production by OPEC Plus – Organization of Petroleum Exporting Countries and Russia and nine other oil-producing nations – had an added impact on production volumes and the timeline of new projects, according to the firm.
With 3.6 trillion rubles in tax payments, Rosneft us the largest contributor to the Russian state coffers.