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Russia's Lukoil doubles profits in second on diamond unit sale, rouble
August 29, 2017 / 11:13 AM / 4 months ago

Russia's Lukoil doubles profits in second on diamond unit sale, rouble

MOSCOW (Reuters) - Russian oil producer Lukoil’s (LKOH.MM) second-quarter net income more than doubled to 138.7 billion roubles ($2.4 billion), beating forecasts, thanks to the sale of its diamond mining business and a rise in rouble foreign exchange rates.

The logo of Russian oil company Lukoil is seen on a board at the St. Petersburg International Economic Forum 2017 (SPIEF 2017) in St. Petersburg, Russia, June 1, 2017. Picture taken June 1, 2017. REUTERS/Sergei Karpukhin

Analysts polled by Reuters had expected April-June net profit of 121.5 billion roubles, compared with 62.6 billion roubles in the same quarter last year.

A stronger rouble reduces payments of debt denominated in foreign currency.

Lukoil completed the sale of its stake in the Arkhangelskgeoldobycha diamond mine to Otkritie Holding group for $1.45 billion in cash in May. The company said profit before income tax from the sale was 48 billion roubles.

    Lukoil, controlled by its president Vagit Alekperov and his deputy Leonid Fedun, as well as its Russian peers, has not benefited from a global deal to cut oil production, as the stronger Russian currency made oil prices denominated in the rouble cheaper.

    The price of Russian flagship Urals oil blend fell by more than 4 percent in the second quarter, year-on-year, to almost 2,800 roubles per barrel on average.

    Lukoil’s shares were down 1.2 percent at 0917 GMT, tracking weaker oil prices and underperforming the broader Moscow stock exchange , which declined by 0.7 percent.

    Sales in the second quarter rose to 1.36 trillion roubles from 1.34 trillion roubles in the year-earlier period, while earnings before interest, taxes, depreciation and amortization (EBITDA) fell to 179.1 billion roubles from 189.6 billion roubles.

    Reporting by Olesya Astakhova; writing by Vladimir Soldatkin; editing by Susan Thomas

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