LUKOIL posts a 29% drop in half-year profit

LUKOIL’s net income according to US GAAP was $4,807 million in the first half of 2012, which is a 29.0% decrease y-o-y, the Company's press release said.

EBITDA was $8,808 million, which is a 17.6% decrease y-o-y. Negative effect of foreign exchange differences had a significant impact on net income. Nevertheless, LUKOIL continues to show the best financial efficiency in the industry.

Sales revenues reached $67,658 million (+4.8% y-o-y). Net debt in the first half of 2012 decreased by $893 million or by 14.1% in comparison with the beginning of the year.

Capital expenditures including non-cash transactions in the first half of 2012 were $5.4 billion. Free cash flow in the first half of 2012 was$1,699 million.

In the first half of 2012, lifting costs per boe of production were $4.86, which is a 2.0% decrease y-o-y. Cost inflation was offset by ruble depreciation in the second quarter of 2012 and efficient cost management.

In the first half of 2012, LUKOIL Group total hydrocarbon production available for sale reached 395.1 million boe, which is a 0.2% decrease y-o-y. Crude oil and natural gas liquids production of LUKOIL Group in the first half of 2012 totaled 336.4 million bbl. Production of gas available for sale increased by 10.1% y-o-y, to 9.96 bcm, mainly due to launch of new gas projects in Uzbekistan.

In the first half of 2012 throughputs at the Company’s refineries (including its share in crude oil and petroleum product throughput at the ISAB and Zeeland refining complexes) decreased by 1.3% y-o-y and reached 1.280 million barrels per day. Output at the Company’s refineries in Russia decreased by 3.6% y-o-y mainly due to scheduled maintenance at the Nizhny Novgorod Refinery in the first half of 2012, while output at the Company’s international refineries increased by 6.6% y-o-y mainly due to an increase in shareholding in ISAB refining complex from 49% to 60%.

Measures aimed at higher efficiency and cost control allow the Company to increase net income and operating efficiency.