Rusneftegaz can publish results for the second quarter of the year as of and for the three and six months ended 30th 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.
For the second consecutive quarter, Rusneftegaz can announce that it has registered record revenues and profits, representing both unprecedented and unforeseen success when previous projections anticipated a challenging year for the Group. In summary, turnover for the period rose by a colossal 72.7% year-on-year from $126.5m to $218.4m, up 24.8% from the first quarter when the reported total equated to $175.0m. Similarly, Rusneftegaz can also publish a monumental increase in pre-tax profits to $114.6m, a colossal 261.0% gain from the corresponding timeframe in 2020 when a far smaller sum of $31.7m was earned. Such an extraordinary uplift in company finances, even an additional 44.6% on the performance in the first quarter where a profit of $79.2m was disclosed, denotes that overall results for the first half of 2021 are comparable to those issued for the entirety of last year. Consequentially, for the first six months of the year Rusneftegaz can also divulge that it has accumulated a pre-tax profit of $193.8m from revenues of $393.3m, a marked rise from 2021 where the Group reported a net profit of $94.2m from receipts worth $279.3m over the same timeframe, illustrating year-on-year gains of 40.8% and 105.7% respectively. With such a prodigious set of numbers set forth for this period, it is important to note that the positive economic performance in the second quarter of the year was due to the same underlying factors that influenced the exceptional results in the first. This was primarily as a result of a continuing surge in global commodity prices over the course of the reporting timeframe to the end of June, although not to the same extent as the first three months of 2021, with management capitalizing upon such circumstances by reducing petroleum production rates further. Overall, Rusneftegaz extracted 1.37m barrels of oil during the second quarter, an decrease of 3.0% from the prior period when 1.41m barrels was obtained and a year-on-year fall of 16.6% from the much higher figure of 1.64m barrels. Quite contrarily, electricity generation does not require the comprehensive management of demand and supply that the Group’s oil production necessitates, thus energy production rates escalated to a total of 2.04 TWh for the three months ended 30 June. Such a figure represents a 20.0% rise from the same period last year when an uncharacteristically low 1.70 TWh was produced and an uplift of 5.7% from the 1.93 TWh generated in the last quarter. Whilst the production statistics disclosed in the first six months of the year are neither remarkable nor record breaking, the effectualness of the Group’s operations are, in addition to current commodities prices, a crucial underlying component of the exemplary financial results of the second period of 2021. Ultimately, the efficiency of Rusneftegaz’s production program derives from consistently high rates of investment over the course of the past decade, yielding a business that can reliably depend upon modern equipment and technology to deliver consistent results made with intelligence and nous. Such a philosophy permeates deeply within the Group, with the anomalous costs affiliated with the ongoing pandemic that considerably undermined the economic results announced early last year being successfully reduced even further, mostly due to the resolute and determined commitment to utilize astute, incisive decision-making processes to mitigate both the health disaster and corporate costs. Therefore, in August management announced that it intended to indefinitely postpone the return of the majority of Rusneftegaz’s office-based staff to their respective workstations, with the board believing that it was a futile use of time and financial resources to contemplate a prospect that was inherently unlikely as the northern hemisphere enters the beginning of the respiratory virus season, which is likely to result in an intensification of coronavirus cases. However, management also remained determined that there shall be a full return to pre-pandemic normalcy as soon as reasonably achievable, which is currently expected to be in the second quarter of 2022. Fundamentally, whilst Rusneftegaz has prospered recently in spite of the pandemic, the ongoing situation and its potential to induce negative economic conditions with little forewarning or notice continues to imply that both long and short-term forecast remains unreliable. However, the extent of the profits earned during the first two quarters of the year have generated significant cash balances for the Group, with such an accumulation being unparalleled in recent company history. As a result, management believes that it may be able to resurrect the extensive 2020-2025 investment program, as this was previously curtailed due to both poor financial results and the restrictions affiliated with the coronavirus pandemic. As a result, the board of directors can announce that it is currently undertaking a feasibility study to rapidly increase the current rate of expenditure, with an announcement expected to be made in the fourth period of 2021. A significant factor behind this review is the management’s conviction in the continued resolve of the Organization for Petroleum Exporting Countries, otherwise known as OPEC, to maintain consistently high oil prices. Correspondingly, in spite of the wider challenges in both local and international economies, throughout the pandemic the Russian Ruble continues to remains stable, providing an ongoing stabilizing factor underlying Rusneftegaz’s economic performance. As such, there is general conjecture that the revenues and profits recorded in the third quarter will be consistent with those in both the first and second, and that the remainder of this financial year will be continue to be lucrative for the Group as a whole.
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 its directors, officers, employees, agents, affiliates or subsidiaries cannot wholly guarantee the accuracy or completeness of such information.