Rusneftegaz can publish results for the first quarter of the year as of and for the three months ended 31 March. These statements were prepared in accordance with International Financial Reporting Standards, otherwise known as IFRS, and have not been audited. The full results are disclosed in the financial section of the Group's website.
In the first period, Rusneftegaz registered a markedly improved financial performance when compared directly to be the same quarter last year and also the final three months of 2020. Overall, management can report a pre-tax profit of $79.2m from revenues of $175.0m, both of these figures being the highest quarterly figures recorded in the history of the Group. Such totals represent an extraordinary reversal from this stage in 2020 where management disclosed serious and problematic concerns regarding the short-term financial prospects of the company. Hence, the published turnover data represents an increase of 14.5% year-on-year and a 76.3% rise from the three months prior to the beginning of the year, when the revenues for these quarters equated to $152.8m and $99.2m respectively. Similarly, the profit announced in this disclosure epitomizes a growth of 26.9% from the same time in 2020 when the figure announced only amounted to $62.5m, which albeit is significantly greater than the $0.3m earned during the quarter ended 31 December 2020. Such a monumental surge in financial performance throughout this reporting period can largely be attributed to a surge in commodity prices that occurred throughout the quarter, with the cost of a barrel of oil uplifting from lows in 2020 when it was scarcely profitable for Rusneftegaz to continue operations back to rates last seen prior to the pandemic. Another major contributing factor is a notable reduction in both unforeseen and unexpected costs arising when compared to prior quarters, with management and Rusneftegaz staff now having greater comprehension and understanding of how to manage the complexities and intricacies of an international business during a major health incident, overall resulting in a material reduction in contingency expenditure. However, in spite of this reduced spending, the board of directors believe that it would be unwise to make any considerable revision to Rusneftegaz’s short or long-term strategies due to the lack of reliable forecasting and projections available at this time, including any amendments to the altered investment plan published in January following an internal review. As such, the Group will not increase investment levels this year in order to grow current cash balances to counter any market volatility in the months ahead, nor will the changes to staff hours agreed in final months of 2020 be reversed, although production rates for the second period of the year are anticipated to be broadly similar to those in the first. For this quarter, Rusneftegaz extracted 1.41m barrels of oil, a reduction of 10.8% compared to the same time last year, but an uplift of 1.9% from the previous quarter. Likewise, total electricity generation for the last three months amounted to 1.93 TWh, which was down 38.7% on the final weeks of 2020 but up 9.7% year-on-year. Nevertheless, in spite of anticipations of a poor economic situation for the three months ended 31 March, management is now increasingly bullish for the remained of the year. At the time of this quarterly update, global oil production rates are being extensively managed by firms operating within the remit of the Organization for Petroleum Exporting Countries, otherwise known as OPEC, yielding continual rises in commodity prices. Whilst international production remains stable, this largely defers any broader economic issues relating to the pandemic, such as lower demand for oil products, in the immediate future. Ultimately, it is the view of Rusneftegaz’s board of directors that there will not be a return to a routine course of business until there is a degree of herd immunity from the novel coronavirus. Therefore, management is currently utilizing global vaccination rates as a key indicator of a return to the normality experienced prior to March 2020. With inoculation programs expected to be completed in most industrialized nations by the end of the third quarter, the Group hopes that forecasts for the fourth period of the year and the 2022 financial year shall be more dependable than those used at this present time.
The financial details in this article are current at the date of this report, and believed by Rusneftegaz to be accurate and true. All information is disclosed as a summary and does not purport to be complete. The data that this commentary is dependent on is obtained from sources believed to be reliable, but the Group, nor any of the directors, officers, employees, agents, subsidiaries or affiliates, can wholly guarantee the accuracy or completeness of such information.