MOSCOW – Russia's second-largest oil company, Lukoil, said Tuesday its net profit rose year-on-year by nearly 40 percent in the third quarter, to $2.8 billion, because of strong sales and higher oil prices.
The Moscow-based company said in a statement Tuesday its net profit rose from $2 billion in July-September 2009, beating analysts' forecasts.
Strong profits were buttressed by a rise in crude oil sales by 21 percent to $26.5 billion in the third quarter.
Lukoil shares were up 1.1 percent in early trading on Moscow's MICEX stock exchange, outperforming the market.
Lukoil, Russia's largest private oil company, said its strong performance and prudent financial discipline have helped it to accumulate a record-high free cash flow of nearly $7 billion in the first nine months of the year, compared to $1.4 billion a year ago.
This came despite the fact that Lukoil spent some $4.4 billion earlier this year to buy its own shares from U.S. oil firm ConocoPhillips.
Conoco, which owned 20 percent in Lukoil, sold most of the shares to raise money to repay debt and buy back its own shares, but retained 7.4 percent in the company.
Lukoil in April launched a key new field, Korchagin, Russia's first offshore Caspian Sea project, but has not started producing significant amounts of oil there yet, anticipating export tax exemptions possibly as early as next month.