Russia’s Lukoil sees oil output at pre-crisis level in 2023, reports profit jump
Lukoil LKOH.MM, Russia’s second-biggest oil producer, on Wednesday reported third-quarter net income of 192.5 billion roubles ($2.59 billion), up 1.4% from the previous quarter and said its oil output would return to pre-pandemic levels in 2023.
For the January-September period, profit jumped to 539.7 billion roubles, against a loss of 14.3 billion roubles in the same period last year, dynamics largely down to the COVID-induced oil price slump in 2020 and subsequent rebound this year.
“Besides higher EBITDA, profit dynamics is attributable to non-cash losses from assets impairment and foreign exchange loss in 2020,” Lukoil said in a statement.
Lukoil now plans to produce 83 million to 84 million tonnes of oil a year in Russia over the next three years, the company said on a conference call, and expects capital expenditure in 2022 of about 550 billion roubles, excluding the West Qurna-2 project in Iraq.
Net income was in line with the consensus forecast, SOVA Capital senior analyst Mitch Jennings said in a note, but revenue and EBITDA both came in above expectations.
“Free cash flow came in nearly double our expectation thanks to lower capex,” he said in a note.
For the first nine months of 2021, free cash flow stood at 502.5 billion roubles, compared with 195.6 billion roubles for the same period of 2020. It more than doubled quarter-on-quarter in the third quarter.
Lukoil also said it was close to using 100% of spare oil output capacity and forecasts output growth of 4% in 2021, excluding West Qurna-2.
Source: Reuters (Reporting by Olesya Astakhova Writing by Alexander Marrow Editing by David Goodman and Louise Heavens)