Lukoil 3Q Profit Plunges 20%
Lukoil reported on Friday a 20% drop in third-quarter profit, as higher taxes and deprecation of the ruble weighed on its margins.
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 (NYSE:CVX) and ExxonMobil (NYSE: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.