Rosneft, reporting better than expected

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On Tuesday August 7 in the afternoon ordinary shares of “Rosneft” has updated the historical maximum: the peak marks the price of the paper was 426,75 RUB, later stir a little sleep, on average, the paper adds 0.8 percent. The company’s market capitalization currently stands at 4.5 trillion RUB a little More and Rosneft will surpass the capitalization of Sberbank, taking into account both preference and ordinary shares, the figure the Bank is 4.65 trillion.
The growth of shares of “Rosneft” for several days due to the news about the beginning of the repurchase and positive statements. Today, the company has presented financial statements under IFRS for the second quarter and first half of 2018. In the second quarter revenue compared to the same period last year increased 2.8 times and amounted to 228 billion rubles In the first six months increased 1.4% to 309 billion rubles. Revenue from sales for the second quarter rose by 19.9% yoy in the first half of 29.3% yoy, which contributed to the rise in oil prices in the reporting period.
The average price of Urals oil in the second quarter in dollar terms grew by 11% QoQ, and in the first half of 36% yoy. Thus, the net profit margin increased in the second quarter from 4.7% to 11% in the first half of the year increased from 2.7% to 8.2%.
It is worth noting that improved financial performance is positively influenced by the reduction in capital and operating costs. In addition, the company has reduced debt burden, which so troubled many in recent times. At the end of six months, the ratio of net debt to EBITDA declined by 26% to 1.5 x, which is quite acceptable, but to the world counterparts on this indicator the company does not hold, for example, Exxon Mobil’s net debt to EBITDA ratio March 31, 2018 0.96 H.
Financial results of the company, the positive expectations regarding oil prices, as well as step-by-step implementation of the investment strategy allows us to positively assess the future dynamics of shares of “Rosneft”. Our recommendation is to keep. And for those who is not yet a holder of the shares of “Rosneft” should pay attention to their purchase at the time of the price adjustment. By the way, do not forget that the net profit growth of the company can have a positive impact on dividend payments.
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Anna Kokoreva,
The Deputy Director of analytical Department,
Alpari