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. Last Updated: 07/27/2016

Surgutneftegaz Says 2001 Profits Halved

SURGUT, Western Siberia -- No. 3 oil major Surgutneftegaz reported Tuesday that its net profit nearly halved to 10.8 billion rubles ($347 million) in 2001 from 19.5 billion rubles in 2000.

Analysts, however, said confusion over the company's unorthodox version of Russian accounting standards clouded its real financial position.

The accounts roughly equate net profit with retained earnings.

Surgutneftegaz's net profit figure includes deductions for reserve funds and investment.

The company pays dividends on that figure, a practice that has provoked harsh investor criticism and weighed on its stock price.

Analysts said the figure of 51.7 billion rubles, given by the company as "operating profit," was closer to more a traditional understanding of net profit.

It gave no comparatives for that figure.

Russian accounting standards differ sharply from Western accounting standards, but analysts say they normally point to trends in companies' finances.

The figures were reported in materials that were distributed to journalists ahead of the company's annual meeting, which is set for Saturday.

Surgutneftegaz general director Vladimir Bogdanov told journalists in February that lower global crude prices, rising costs and an increased tax burden would hit the oil producer's 2001 results.

Sales revenues fell to 147.1 billion rubles in 2001 from 156.6 billion rubles the previous year, the company said.

Costs rose to 70.9 billion rubles from 58.9 billion rubles the previous year, and the company's profit tax bill fell to 13.2 billion rubles from 21.7 billion rubles.

A figure listed as pretax profit fell to 64.9 billion rubles from 86.2 billion rubles in 2000.

Surgutneftegaz has promised results according to U.S. generally accepted accounting principles, but company officials in Surgut declined to say when those results would be available.

Oil output rose to 44 million tons from 40.6 million tons in 2000.

The company only pays dividends on the core company, Surgutneftegaz, which is listed on the stock market.

Consolidated with its refineries and other affiliates, 2001 net profits totaled 11.4 billion rubles on sales revenues of 163.6 billion rubles after 31.4 billion rubles net profit on sales revenues of 171 billion rubles in 2000.