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. Last Updated: 07/27/2016

Rosneft's H1 Profits Up 7 Times

Oil firm Rosneft on Thursday announced a sevenfold rise in first-half profits as the state-owned company, bulked up by the assets of fallen oil major Yukos, prepares for an initial public offering.

Rosneft made a net profit of $2.44 billion in the first six months of this year, compared with $340 million in the same period of 2004, the firm said, reporting unaudited U.S. generally accepted accounting principles results.

Rosneft's oil output tripled when it bought Yukos' main production company, Yuganskneftegaz, for $9.4 billion at the end of 2004. Court marshals seized and sold Yugansk after Yukos failed to pay punitive back taxes.

Rosneft's revenues rocketed by almost 500 percent to $6.72 billion in the first half of 2005, compared with $1.15 billion a year earlier.

Its debt also ballooned from $2.3 billion on June 30, 2004, to $12.6 billion at the end of the year. By June 30 this year, the firm had trimmed consolidated net debt to $11.21 billion, it said. Sergei Alexeyev, first vice president for finance and economics, said at a news conference that 23 percent of Rosneft's exports were used as collateral on its debt, which was expected to further fall to $10.5 billion to $11.2 billion by the end of 2005.

Russia is planning to partially privatize Rosneft, with a possible sale of a stake and a potential IPO in London penciled in for next year.

The transaction would be the final stage in a complex series of deals, enabling the state to repay a $7.5 billion loan raised to buy back majority control of state gas monopoly Gazprom. The loan is secured on a 49 percent Rosneft stake.