Higher taxes hurt profit at JKX Oil as the firm forgoes dividend

SHARES in FTSE 250-listed JKX Oil and Gas fell more than four per cent yesterday after the energy group posted a drop in first-half operating profit, weighed down mainly by higher taxes in Ukraine.

Pre-tax profits at the eastern Europe-focused oil group fell 32 per cent to $32.7m (£20.1m) for the six months to 30 June, from $49.1m for the same period last year.

The oil and gas producer also scrapped its interim dividend, citing higher project costs in Russia and higher taxation in Ukraine, which are both impacting its cash flow. It paid a dividend of 2.4p last year.

JKX’s shares, which have lost around 41 per cent in value since it said in March that its key gas project in Russia would be delayed by about three months, closed at 187.4p.