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. Last Updated: 07/27/2016

Surgut Q1 Net Profit Doubles to $400M

No. 4 oil firm Surgutneftegaz said Friday its net profit nearly doubled to $400 million in the first quarter of 2003 over the same period a year ago due to high world oil prices and increased output.

The firm, heavily criticized by investors, who say it lacks an expansion strategy and mistreats minority shareholders, said it posted a net profit of 12.23 billion rubles compared to 6.34 billion in January-March 2002.

Troika Dialog brokerage said the results were disappointing compared with the fourth quarter of 2002, as sales rose a mere 6 percent despite a 16 percent rise in export prices.

"This appears to be the result of export constraints, which compounded the glut on the domestic market and sent local crude prices down 47 percent," Troika said.

"Due to its lack of refining capacity, Surgutneftegaz is particularly exposed to domestic crude prices," it added.

Surgut did not provide comparison for the fourth quarter of 2002.

Troika said its estimates showed that Surgut operating costs were flat quarter on quarter, which boosted operating profits 8 percent.

Net profit dropped 8 percent quarter on quarter.

"This was due to non-operating expenses, which could represent year-end bonuses traditionally reported in the first quarter," Troika said.

Troika also said it estimated that Surgut's cash and cash equivalent position, the largest in the Russian oil industry, had risen by $750 million over the quarter to $5.9 billion.

"We have made no changes in our approach to valuing the company's cash -- we discount this by 50 percent in the belief that Surgut destroys its value by not putting it to use or distributing it to shareholders," Troika said.

Sibneft, Russia's fastest growing oil major, said its net profit totaled 463.9 million rubles ($15 million) in the first quarter compared with a net loss of 486.7 million rubles in the same period last year.

Pretax profit under Russian accounting standards totaled 842 million rubles ($27 million) compared with a loss of 317.9 million rubles in the same period last year.

Sales revenues rose to 28.9 billion rubles from about 12 billion rubles.

The company's costs totaled 22.654 billion rubles, rising from 10.790 billion rubles in the first quarter of 2002.

n  Tatneft, based in the republic of Tatarstan, said its net profit in the quarter jumped more than 40 percent to 3.24 billion rubles ($105 million).

In a report, the company said its revenues rose 17.5 percent on the year in the first quarter to 21.1 billion rubles.

The company's costs in the period jumped to 20.1 billion rubles from 12.5 billion rubles in the same period last year.

Pretax profit stood at 4.4 billion rubles, up 71.6 percent on the year.

n  Meanwhile, second-tier Bashneft, located in the republic of Bashkortostan, increased its net profit 1.32 billion rubles ($43 million) in January-March this year from 598.4 million rubles in the respective period last year, the company said in a report Friday.

The company's pretax profit stood at 1.86 billion rubles in January-March, up from 790.86 million rubles in the year-earlier period.

The company's revenues jumped 46.8 percent in the period to 10.54 billion rubles.

(Reuters, Prime-Tass, MT)