Lukoil PJSC, Russia’s second-largest oil producer, said first-quarter profit dropped 59% as crude prices declined to a 12-year low.
Net income fell to 42.8 billion rubles ($651 million) from 104 billion rubles a year earlier, the Moscow-based company said in a statement on Monday, Bloomberg reported.
That beat the 41.3-billion-ruble estimate of six analysts surveyed by Bloomberg.
Free cash flow declined 43% to 36 billion rubles.
Earnings before interest, taxes, depreciation and amortization fell to 145 billion rubles, missing the 158-billion-ruble estimate of seven analysts. Revenue fell to 1.18 trillion rubles, Lukoil said.
Free cash flow “is the weakest point in the entire first-quarter report”, said Alexander Kornilov, an oil and gas analyst at Aton. “Free cash flow is the key thing investors watch in Lukoil numbers, making judgments about the company’s capability to increase its dividend payments in ruble terms.”
Russian producers have been partially buffered against the rout in crude by a weaker ruble, which has reduced costs and taxes that decline with lower prices.
While higher output helped smaller rivals Bashneft PJSC and Gazprom Neft PJSC boost profit in the first quarter, Lukoil’s production in Russia has dropped.
Production at the company’s largest Western Siberia unit dropped 8.4% to 865,000 barrels a day.
