Growth rate

Transneft increased net profit

The second quarter was successful for the domestic oil industry. Yesterday Transneft published its financial results under RAS. The monopoly's profit in the second quarter increased almost threefold compared to the first, to 1.567 billion rubles.

Experts explain the financial success of Transneft by the difference in exchange rates. “In the second quarter, the ruble strengthened by 7-8%, which affected the growth of the company’s net profit. Its increase may also be associated with paper items: for example, cash flows could be redirected to the parent holding. Usually, Transneft, on the contrary, tries to concentrate them in its subsidiaries so as not to pay high interest on preferred shares,” Denis Borisov, an analyst at IFC Solid, told Vremya Novostei.

Despite the favorable results in the second quarter, the company's results for these six months are worse than for the first half of 2008. Transneft's net profit from January to June amounted to 2.213 billion rubles, 3.4% less than in the same period last year (2.291 billion). Net assets in the second quarter increased by 36.1%, from 442.4 to 602.3 billion rubles. The company explains this by “an increase in the cash balance associated with obtaining loans.” Transneft has a rich credit history. It has recently taken the most significant loans from China; according to the agreement on the construction of a branch from the ESPO to the Celestial Empire, the Development Bank lent it $10 billion. The monopoly received half of these funds at the end of June.

In addition, in June-July Transneft received 5.5 billion rubles. at Sberbank, which opened a credit line for her last year for 40 billion rubles. Yesterday, Transneft reported that the board of directors decided to place the second issue of ten-year bonds for 5 billion rubles. The company posted its first issue in early June. In total, as its head Nikolai Tokarev reported, this year it is planned to issue long-term bonds worth 135 billion rubles.

“Transneft now faces the task of completing the construction of ESPO on time, which has already been postponed. The company promised to do this in the fourth quarter, so it needs ample financing,” says Mr. Borisov. In addition, according to the expert, Transneft needs funds to finance its other projects - BTS-2, the Burgas-Alexandroupolis pipeline, the construction of which has had problems. As it became known this week, Bulgaria, which owns 24.15%, may reconsider its financial participation in this project (Greece owns another 24.71%, the remaining shares will be divided between Rosneft, Gazprom Neft and Transneft). In an interview with the Financial Times, the country's Finance Minister Simeon Dankov said: “During a crisis, we do things that we would not do in another situation.” Now, he said, the country does not have the opportunity to finance the project. The newspaper notes that Bulgaria began to talk about the inexpediency of cooperation with Russia in June, when the country signed an agreement on the construction of Nabucco. “It is quite possible that Transneft will have to shoulder Bulgaria’s obligations to finance construction. However, I don’t think that this will be difficult for the company - the current situation still allows it to make new borrowings. Moreover, the liquidity shortage has apparently ended,” Mr. Borisov believes.

Kirill MELNIKOV