LUKOIL TO PUBLISH FINANCIAL RESULTS FOR THE FORTH QUARTER 2008 ON APRIL 7, 2009
Friday, March 27, 2009
LUKOIL will officially release financial results for the forth quarter and full year 2008 on April 7, 2009. Due to the crisis and extreme volatility in currency and commodities markets during the period, the results will include some impairments and non-routine charges.
1. Currency translation loss. The decline of the value of the Russian Rouble and EURO against the US Dollar has had a positive effect on our operating costs, capital expenditures and overall cash flow. However, the overall change in the net monetary position of the Group in the forth quarter will result in a currency translation loss preliminarily estimated at $950 million for the quarter. The main drivers behind this figure are decrease of US Dollar value of rouble nominated accounts receivable, VAT refunds and other taxes receivable, and negative effect of the quarter movement of the Euro versus the US Dollar on some of our international operations.
2. Dry hole write-offs. As no commercial reserves were discovered at some projects the Company expects to write-off approximately $170 million in Exploration Expenses.
3. Crude oil and products inventory write-offs at refineries and retail networks of LUKOIL due to the sharp decline in realized prices in the forth quarter of 2008. The amount of the write-offs and asset impairments is preliminarily estimated at $850 million.
All of these impairments and write-downs are connected with a series of simultaneous unfavourable financial and price factors which do not have an analog in the contemporary history of the oil industry. In fact, the preliminary operating and financial indicators from the first months of 2009 demonstrate stabilization and a strengthening trend in the operations of the Company and its cash flow.
The information is based on preliminary data, which may be adjusted and corrected during preparation of LUKOIL consolidated financial accounts for 2008. So the figures in this press release may differ from those, which will be published in the financial accounts.