Rosneft (MCX: ROSN) said on Friday that it returned to profit in Q4 of 2020. The company attributed its hawkish quarterly performance to the multi-billion deal with Trafigura. The oil giant, however, saw a close to 80% decline in its full-year net income due to the Coronavirus pandemic that pushed crude-prices to historic lows last year.
The COVID-19 crisis has so far infected more than 108 million people worldwide and caused over 2.3 million deaths. As per Rosneft, it sold its 10% stake in Vostok Oil project for £6.13 billion to Trafigura.
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Rosneft shares closed the regular session a little under 2% up on Friday. The stock has recovered more than 100% since its year to date low in March 2020 when the COVID-19 crisis wreaked havoc on the global oil market. Learn more about how to pick winning stocks.
Rosneft reports a 33.6% decline in revenue to £56 billion
Rosneft, in which British Petroleum has a 19.75% stake, said that its net profit in 2020 printed at £1.44 billion. The return to profit, it added, paves the way for the company to make dividend payments for 2020. CEO Igor Sechin said on Friday:
“Despite all the difficulties of 2020, the company has achieved a net income, which will be the basis for the distribution of dividends in accordance with the dividend policy.”
Other prominent figures in the Russian integrated energy company’s financial update on Friday include a 33.6% year over year decline in revenue to £56 billion. Rosneft said that its EBITDA (earnings before interest, taxes, depreciation and amortisation) in 2020 slid to £12 billion or 42.6% lower than last year.
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BCS Global Markets analysts’ comments on Rosneft’s financial update
Analysts at BCS Global Markets also commented on Rosneft’s report on Friday and said:
“Rosneft big beat at the net income line means a dividend will be paid, if small.”
Forecasting a dividend of roughly 6.9 pence per share, they said in an emailed note:
“It is possible this low a dividend will prove politically inexpedient, so a payment above the 50% minimum payout seems at least possible.”
In a prior report published in November, Rosneft had reported £630 million of loss for the fiscal third quarter. The Russian energy giant performed slightly downbeat in the stock market last year with an annual decline of close to 5%. At the time of writing, it is valued at £52 billion.
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