June 4, 2019 / 9:48 AM / 3 months ago

UPDATE 1-Azeri SOCAR says net profit fell to $706 million in 2018

(Adds details, quotes)

By Margarita Antidze and Nailia Bagirova

BAKU, June 4 (Reuters) - Azeri state energy company SOCAR said on Tuesday its net profit fell to 1.2 billion manats ($706 million) in 2018 from 2.1 billion manats a year earlier, while operating profit rose to 3.6 billion manats from 2.5 billion.

The company’s revenues rose to 111.2 billion manats from 92.6 billion manats, while spending increased to 107.6 billion manats from 90 billion manats, it said in an annual financial report audited by Ernst & Young.

“The company completed a third straight year of profit, despite a rise in spending due to a doubling of profit tax and exchange-rate fluctuations in a number of countries where SOCAR operates,” SOCAR vice president Suleyman Gasimov told Reuters.

He added that the rises in revenue and spending were mainly attributable to SOCAR’s trading arm, SOCAR Trading.

Gasimov said the rise in profit tax stemmed from an increase in SOCAR’s share to 25 percent from 11.65 percent in the Azeri-Chirag-Guneshli project.

He said SOCAR’s debt reached $8.8 billion by the end of 2018, including debts held by the company’s Turkish subsidiary and SOCAR Trading, as well as Eurobond debt.

SOCAR plans no new Eurobond issuance this year, but may apply for loans from banks abroad to refinance existing debt as well as to implement new projects, Gasimov said.

“We intend to receive another $150 million loan at LIBOR +2.7% from Natixis bank to refinance other loans,” Gasimov said.

French corporate and investment bank Natixis has already provided SOCAR with a $617 million loan to finance its STAR refinery in Turkey.

Gasimov said SOCAR planned to increase its investment in projects in Azerbaijan this year, including modernisation of the country’s sole oil refinery, to 5.6 billion manats from 4.6 billion manats in 2018.

$1=1.7 manats Reporting by Margarita Antidze and Nailia Bagirova; Editing by Dale Hudson

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