Rusneftegaz can publish results for the second quarter of the year as of and for the three and six months ended 30 June. 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.
Over the course of the last three months and the first half of 2020, Rusneftegaz has faced unprecedented challenges as a result of the ongoing coronavirus pandemic. Such exceptional circumstances have yielded a significantly reduced quarterly profit of $31,7 million for the period from the beginning of April through to the end of June, a decrease of 49,2% from the $62,5 million recorded in the first quarter. This is largely a consequence of a multitude of factors, with our organization amassing significant costs arising from mitigating the probability of viral infection. Moreover, a notable fall in demand for electricity, in conjunction with a growth in sui generis expenses, led to profits in company’s power sector falling to a mere $2,4 million. Similarly, the current global conditions catalyzed an unparalleled collapse in global petroleum demand, causing commodity prices to fall to record lows, including certain futures prices to briefly turn negative. Whilst the prices of refined petroleum products, which are crucial to our organization’s profitability, have since partially recovered, Rusneftegaz’s quarterly revenues totaled $126,5 million, a decline of 17,2% from the first period of the year. In spite of this, petroleum extraction levels during the second quarter attained the highest rate since 2017 due to a pre-planned surge in production over the last three months that was unrelated to the pandemic. Whilst the board of directors is dissatisfied with the financial costs incurred as a result, it has elected to continue to maintain current extraction levels when it became apparent that commodity prices were restabilizing. Likewise, Rusneftegaz’s current investment strategy is to be reviewed and altered accordingly by the board of directors upon consideration of the results reported for the first six months of 2020, with the likelihood of further alterations later if necessary. However, despite the poor financial report disclosed, management maintains a degree of optimism for second half of the year, with a significant improvement in results highly probable for the third quarter. The board believes that it currently cannot provide a reliable projection for the fourth quarter due to the number of material uncertainties, but remains bullish nonetheless. However, Rusneftegaz maintains such significant resources that management believe that our company is capable of bearing any further financial burdens arising in the near term, with this period demonstrating the strength, resilience and tenacity of the entire organization.
The financial details in this article are current at the date of this report, and believed by the Group 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.