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. Last Updated: 07/27/2016

Business in Brief

Fund to Pass $36Bln in '05

Deputy Prime Minister Alexander Zhukov said Tuesday that he expected the stabilization fund to exceed 1 trillion rubles ($36.3 billion) by the end of this year, Interfax reported.

The Finance Ministry would like to use the windfall oil revenues for early repayment of Russia's debts to the Paris Club of sovereign lenders, but there are calls to spend some money inside the country. The fund is currently worth around $26 billion. (Reuters)

February Retail Sales Down

Retail sales declined 0.3 percent in February from January, decreasing for a second straight month, the State Statistics Service said in a report Tuesday.

February retail sales declined even after January sales fell 21.7 percent from the previous month. In January, retail sales declined because the country celebrated a 10-day New Year holiday.

February retail sales were 10.2 percent higher from the same month a year ago, totaling 479.8 billion rubles ($17.4 billion), the service said Tuesday. In January, the sales were also 10 percent higher than January 2004. (Bloomberg)

Nakhodka Pipeline Review?

Russian and Japanese environmental activists asked Japanese Prime Minister Junichiro Koizumi to persuade Russia to review a plan to build a $15.5 billion oil pipeline to the Pacific coast, Interfax reported.

The activists argue the pipeline's route threatens ecosystems of Lake Baikal and Perevoznaya Bay, Interfax said, citing a letter to Koizumi.

There are "viable alternatives" for the pipeline's planned route, the environmentalists said, without naming these alternatives, Interfax said. (Bloomberg)

No More Gas Subsidies

Gazprom plans to drop regulated gas prices for industrial consumers next year to stop subsidizing industries and boost competition among the country's gas producers.

"The gas sector is playing the role of a strong financial donor for practically all spheres of the country's economy, including highly profitable and export-oriented consumers, by supplying them with cheap gas," Gazprom said Tuesday in a statement.

Gazprom is proposing to keep regulated prices only for households and organizations funded from the state budget, the company said. (Bloomberg)

Yukos Venture's New CEO

BUDAPEST -- Hungary's MOL and Yukos named Igor Chernov as the chief executive of their Siberian production venture after his predecessor's arrest, the daily Napi Gazdasag reported, citing a Hungarian executive.

The venture will give its full support to the previous CEO, Igor Vitke, who was detained on March 9 on charges that the company pumped more oil than its license allowed, said Szabolcs Ferencz, a MOL executive, according to Napi. (Bloomberg)

Norilsk Eyeing Energo

Norilsk Nickel may be about to snap up utility Taimyrenergo, a key supplier to its plants that is being restructured under power sector reforms, Kommersant reported Tuesday.

The newspaper said that Taimyrenergo's restructuring had been agreed on by Industry and Energy Minister Viktor Khristenko as part of power sector reforms.

If the deal goes ahead, Kommersant said Norilsk Nickel would invest $70 million to modernize the utility. The newspaper cited unnamed sources in its report. (Reuters)

Severstal Spending to Rise

Severstal, Russia's third-biggest steelmaker, expects to boost capital spending by two-thirds this year as it seeks to expand production, director general Anatoly Kruchinin said.

Severstal's capital spending will rise to 24.9 billion rubles ($903 million) this year, from 15 billion rubles last year, Kruchinin said at a conference in Moscow on Tuesday. The company wants to increase production by 13 percent within five years. (Bloomberg)

LUKoil to Buy 5% of Ritek

LUKoil, Russia's top oil producer, said it would buy 5 percent of Ritek as part of a plan to consolidate control over its subsidiaries. Ritek shares rose to a record high on the news.

LUKoil now holds 59 percent of Ritek. It plans to buy more Ritek shares at market prices from shareholders not affiliated with LUKoil, the company said in a statement. LUKoil owns 38.6 percent of Ritek directly and 20.5 percent through its unit LUKoil-Western Siberia.

LUKoil will start buying shares once it receives approval from anti-monopoly authorities, LUKoil spokesman Mikhail Mikhailov said. It has not yet made any agreements to buy Ritek shares from current holders, he said. (Bloomberg)

$114M Ilyushin Deal

Planemaker Ilyushin said it may reach an agreement to lease six Il-96 planes to national airline Aeroflot in two or three weeks.

The company also plans to lease two Il-96 planes to Cuba by the end of the year, said Konstantin Dozhdikov, head of the analytical department at subsidiary Ilyushin Finance.

Each plane may cost Aeroflot about $57 million, Dozhdikov said. He declined to specify the value of the Cuban contract. (Bloomberg)

MTS Q4 Profit Up 37%

Mobile TeleSystems, Eastern Europe's largest mobile phone provider, said fourth-quarter profit rose 37 percent and proposed paying dividends equivalent to one-third of net income.

Profit rose to $209 million, or 10.5 cents per share, from $153 million, or 7.7 cents, a year earlier, the company said in a statement. Sales advanced 40 percent to $1.08 billion, based on U.S. generally accepted accounting standards.

MTS added 7.5 million new subscribers in the fourth quarter, the majority in December, as citizens registered for the service during the holiday season. (Bloomberg)

Singapore's MTS Stake

Temasek Holdings, the Singapore government's investment arm, in December bought a 2.6 percent stake in Mobile TeleSystems, officials from both organizations revealed Tuesday.

Temasek made the investment when Deutsche Telecom sold a 15 percent stake in MTS on Dec. 17, Temasek's Singapore-based spokeswoman Eva Ho and MTS chief executive Vasily Sidorov confirmed Tuesday.

The purchase was the first "significant" direct transaction by Temasek in Russia, Ho said in a telephone interview from Singapore. (Bloomberg)

$602M Sberbank Profit

Sberbank, Russia's largest bank, earned a profit of 16.6 billion rubles ($602 million) in the first nine months of last year, Interfax reported.

Pretax profit using international accounting standards was 21.5 billion rubles, Interfax said Tuesday, citing the company's web site. (Bloomberg)