Lukoil 3Q Profit Plunges 20%

By Jennifer Booton Energy FOXBusiness

Lukoil reported on Friday a 20% drop in third-quarter profit, as higher taxes and deprecation of the ruble weighed on its margins.

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The Moscow-based company earned $2.2 billion for the quarter compared to $2.8 billion the year prior. Russia’s second-biggest oil producer attributed the decline to a $340 million tax on its foreign currency translation gain.

Indeed, the Russian ruble lost roughly 15% of its value against the dollar during the three months ended September 30 as euro zone debt problems continued to cripple European markets.

The sharply higher costs offset a 26% increase in revenues to $34.6 billion from $26.5 billion a year ago. The company said tighter budgeting and financial discipline helped it to generate cash flow of $7.7 billion in the first nine months of this year.  

Lukoil’s U.S. rivals, including Chevron (CVX) and ExxonMobil (XOM), fared better during the quarter with the help of rising oil prices, which climbed 18% in October.

Chevron’s third-quarter profit of $3.92 a share surpassed average estimates of $3.47, while ExxonMobil reported last month a surprise 41% gain in its quarterly earnings despite a 4% drop in oil production.

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