Rusneftegaz can publish results for the third quarter of the year as of and for the three and nine months ended 30 September. 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.
Rusneftegaz earned a pre-tax profit during the quarter totaling $15,5 million, in spite of continuing, significant difficulties in the current trading environment as a result of the ongoing coronavirus pandemic. This figure is derived from revenues of $112,4 million earned throughout the last three months, an fall of 11,1% from the second quarter where management reported turnover of $126,5 million and a profit of $31,7 million. Year-on-year quarterly financial performance is, however, notably down on 2019, from which revenues and pre-tax profits have receded by 19,1% from $140,4 million and by 74,3% from $60,3 million in the third quarter of 2019 respectively. The degradation in these results can be largely attributed to a decline in turnover associated with the pandemic, but also the volatility in commodity prices throughout the last six months. Whilst these value are lower than projected at the beginning of the year, such figures still ensue that Rusneftegaz’s oil production sites can remain economically viable if these figures do not abate any further. As such, the board of directors elected to change strategy during the first two weeks of September, when it appeared that the oil price was contracting upon speculation of additional measures to contain coronavirus globally. As a result, extraction volumes were limited throughout the third quarter, with average daily production falling from 18.039 bpd in the second quarter to 15.837 bpd in the third. Nonetheless, our energy generation program continues to be lucrative area of operations, where there were increases in electricity production over the course of the last three months from 1,70 TWh to 1,94 TWh, although the total is markedly lower than the 2,06 TWh generated during the same quarter last year. Accordingly, the unexpectedly substandard financial performance in the current financial year as consequence of the coronavirus pandemic has led to the board of directors outlining plans to expand and maintain Rusneftegaz’s cash flows in the near future. As per previous announcements, all administrative staff are to be offered the opportunity to reduce their working hours and our organization has elected to curtail all existing investment plans for the foreseeable future. Notwithstanding, the board still is increasingly ambitious in regards to future capital spending, and it is notable that economic results in 2020 would have been incontrovertibly lower if it were not for the investments made since 2015. Resultantly, management perceives the outlook for the remainder of the year as negative, with a nominal annual profit forecasted if there are no significant changes in the current circumstances, including both commodity prices and demand.
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.