MOSCOW, September 12 (RIA Novosti) - LUKoil [RTS: LKOH], Russia's largest independent crude producer, said Wednesday its net profit, calculated to US GAAP, declined 4.8% year-on-year, to $3.8 billion in the first half of 2007.
LUKoil's revenue in the reporting period stood at $35.8 billion, up 7.7% year-on-year.
The company said that the drop followed falling global oil prices, real ruble strengthening against the dollar and an increase in transportation tariffs.
However, LUKoil said it had partially made up for the negative impact of the above factors by an expanded scale of the company's business, moves to streamline business and an insignificant cut in export duties and subsoil tax.
Despite lower oil prices and tax rates, the company's aggregate tax payments rose 6.6% to $12 billion year-on-year, in the wake of growing exports and retail sales of petrochemicals.
The company also posted a 3.48% drop of profit from core activities to $5.3 billion in the first six months of 2007, and its pretax profit declined 6.8% to $5.1 billion in the same period.
LUKoil's earnings before interest, taxes, depreciation and amortization (EBITDA) reduced 1.8% to $6.4 billion in January-June 2007.
The company's operating costs increased 30.5% to $2.9 billion over real ruble strengthening against the dollar, changes in the Russian tax legislation and a growth of output and refining volumes.
Earlier reports said aggregate oil production by LUKoil Group (production by subsidiaries and LUKoil's share in the production of affiliated companies) increased 3.9%, year-on-year, in January-June 2007, to 48.5 million metric tons (355 million bbls), including 45.6 million metric tons (334 million bbls) in Russia and 2.9 million metric tons (21.3 million bbls) under foreign projects.
LUKoil's net profit amounted to $2.5 billion in the second quarter of 2007, up 8.4% year-on-year, and 93.8% against the first quarter.
"This is the company's absolute record despite the less favorable situation with prices," the company said in a statement.
LUKoil, which accounts for about 1.3% of global oil reserves and 2.1% of world crude output, develops its main deposits in Western Siberia. The company contributes 18% to Russia's oil output and 18% to the country's oil refining.
LUKoil's majority shareholder (63.3%) is Russia's ING Bank (Eurasia), and U.S. oil major ConocoPhillips has a 20% stake in the crude producer.
