* Net rises 7 pct to 342 bln rbls vs 347 bln expected by
* Free cash flow down 54.5 percent to 45 bln rbls
* Rosneft signs direct oil supply contracts
* TNK-BP's $55 bln takeover to be closed in H1
By Vladimir Soldatkin
MOSCOW, Feb 1 Rosneft came in slightly
below forecasts with a 7 percent rise in 2012 net profit on
Friday while free cash flow halved ahead of its $55 billion
takeover of TNK-BP, sending shares in Russia's top oil
Rosneft's shares fell 2.2 percent to lag a 0.1 percent rise
in the Moscow market as the oil firm joined gas export
monopoly Gazprom in delivering weak cash flow numbers
symptomatic of heavy investment.
"The results were bad, I'm surprised. Everything that could
have missed expectations did indeed miss expectations," Uralsib
energy analyst Alexei Kokin said.
Rosneft also announced several deals to supply customers in
Europe directly via the Druzhba pipeline as it aims to reduce
the influence of traders in its sales schemes and cut costs.
Rising costs have prompted Chief Executive Igor Sechin, a
close ally of Russian President Vladimir Putin, to seek to
exercise more control over the company's trading operations by
cutting out intermediaries.
Rosneft said it had agreed several deals to supply its
European customers, such as Total and Shell
directly via the Druzhba (Friendship) inland pipeline.
Rosneft expects to agree a similar deal with Eni.
According to trading sources, after taking the helm at
Rosneft last May, Sechin ordered a purge of the trading
department and launched a revamp of oil and product sales by
Rosneft to boost operational efficiency.
"It is a political move, just to show that we (Rosneft) have
direct contracts at no matter what price," one trader said.
PROFIT BELOW EXPECTATIONS
Rosneft reported a 54.5 percent drop in free cash flow to 45
billion roubles ($1.5 billion) in 2012, although its forthcoming
takeover of cash-generative TNK-BP will bolster its ability to
repay $30 billion in loans to pay for Russia's largest takeover.
The deal to buy TNK-BP from BP and the AAR consortium
of Soviet-born billionaires is expected to close in the first
half of the year.
Rosneft's 2012 net income increased to 342 billion roubles
($11.4 billion) thanks to a rise in production and oil prices,
but missed analyst forecasts.
Analysts polled by Reuters expected full-year net income of
347 billion roubles.
Revenues increased 13 percent to 3.1 trillion roubles, the
company said in a statement, in line with expectations, while
capital expenditure rose by almost a fifth to 466 billion
Last year, Brent crude hit a record average price of $112
per barrel, but some global majors, including ConocoPhillips
, reported a fall in core earnings as oil has become
harder to find and more expensive to extract.
Rosneft's earnings before interest, taxation, depreciation
and amortisation (EBITDA) fell 8 percent to 609 billion roubles
in 2012 though topped a Reuters poll forecast of 596 billion.