“Rosneft” continues to delight investors

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Rosneft reported for the 3rd quarter and 9 months of 2018 in accordance with IFRS. Revenue in Q3 grew by 52% year-on-year and amounted to 2 286 billion rubles in the first 9 months, the growth of 41.1% year-on-year, revenue reached 6 073 billion rubles. Net profit attributable to shareholders also increased compared to the same periods of the previous year by 2.5 times in the 3rd quarter (142 billion rubles) and 3.4% in the first 9 months (451 billion).
EBITDA in the first 9 months increased by 57.7 per cent year-on-year, to 1,010 billion. to Achieve such high results the company has managed due to the increase in sales volumes of oil, gas and petroleum products in the face of rising oil prices. To increase the sales of products allowing a change of the parameters of the deal, OPEC+ in the direction of expanding production. The fourth part of the net profit for the 3rd quarter 2018 is the profit from the activities of “Bashneft”.
However, the capital expenditure of the company grow in the future may adversely affect cash flow. In the first 9 months, the growth was 7.8% yoy (679 billion rubles.). Also during this period, the company made payments on short-term credits and loans, which led to a deterioration in cash flow from financing activities.
Despite some negative aspects in the statement of cash flows, while free cash flow shows a good momentum, and it happens due to good operating results: for the first 9 months grew 4 times year-on-year and amounted to 872 billion.
Following the publication of statements on Tuesday, the company’s shares rose in price by more than 2%. On Wednesday, the growth continues to be around 0.7%. The results of the year for “Rosneft” promises to be favorable, however, the decline in oil prices may adjust market expectations on key indicators in the 4th quarter of 2018. Much will depend on the further fate of the transaction OPEC+. By the way, note should be taken of freezing of the wholesale price of fuel for the domestic market, which can also affect statements of the company.
In General, the cumulative result for the second half should please investors and promises a good dividend payouts.
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Anna Kokoreva,
The Deputy Director of analytical Department,
Alpari