Russia's second-biggest oil producer OAO Lukoil Holdings (LKOH.RS) Wednesday said it returned to profitability in the first quarter due to lower taxes, higher crude prices and lower capital spending.
Lukoil, 20% owned by ConocoPhillips (COP), reported a net profit under U.S. Generally Accepted Accounting Principles of $905 million. Although that was below the year-ago figure of $3.16 billion, due to foreign exchange losses and lower prices, the figure beat a Dow Jones Newswires poll of 10 analysts, who had forecast $595 million.
In the fourth quarter, which Lukoil said was the worst in its history, the company posted a net loss of $1.62 billion due to low oil prices, writedowns and a weaker ruble.
Earnings before interest, taxes, depreciation and amortization halved to $2.41 billion in the first quarter from $4.81 billion - but, again, came in above consensus, due to significant cost savings.
"This trend has been seen in Rosneft's (ROSN.RS) first quarter results already - still positive - implying Lukoil is very competitive and is on the way to higher efficiency amid a weaker ruble and lower service prices," said Lev Snykov, an analyst at VTB Capital in Moscow.
Lukoil cut capital spending by 39% on the year, to $1.47 billion.
"The decrease was in compliance with our plan to reduce capital expenditures in 2009 because of the economic downturn," Lukoil said in a statement.
Revenue fell 41% to $14.75 billion from $24.96 billion, mainly due to lower oil prices and despite a 3.2% rise in crude production in the quarter.
After being hit by the slump on world markets last year, Lukoil's stock has almost doubled in valued since bottoming in mid-February. At 1112 GMT, Lukoil shares were down 2.3% at $54.7 in Moscow.