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Rosneft's profits tumble but margins beat rival

RUSSIA&rsquo;S largest oil producer Rosneft yesterday reported net profits of $1.61bn (&pound;1bn) for the second quarter of 2009, missing the average $1.72bn forecast in a poll of analysts.<br /><br />The company said the drop in net income, from $4.31bn a year ago and $2.06bn in the first quarter, was mainly due to the effective income tax rate rising to 19.9 per cent from 5.7 per cent, and a foreign exchange loss of $391m.<br /><br />But it beat nearest rival LUKOIL on margins in the second quarter, despite the 63 per cent drop in net profit<br /><br />&ldquo;Costs are under more severe control at Rosneft than at LUKOIL,&rdquo; said Raiffeisenbank oil and gas analyst Anna Yudina.<br /><br />VTB Capital analyst Svetlana Grizan said Rosneft was more efficient than LUKOIL in terms of oil production and refining costs.<br /><br />&ldquo;LUKOIL had inflated costs and revenues due to more active trading operations,&rdquo; she said in a note to investors.