Lukoil Profits Drop Nearly 30% in 2024 Amid Asset Losses, Higher Taxes

Russia’s second-largest oil producer, Lukoil, reported a 26.5% drop in net profit for 2024, citing asset impairment losses and increased deferred taxes.

Lukoil posted a net profit of 848.5 billion rubles ($10.1 billion) last year, down from 1.1 trillion rubles ($13.7 billion) in 2023. Revenue, however, rose nearly 9% to 8.6 trillion rubles ($102.1 billion) from 7.9 trillion rubles ($93.9 billion) the previous year.

“The group recognized an impairment loss of 93.3 billion rubles in fixed assets… 50.4 billion rubles related to exploration and production assets and 31.1 billion rubles in processing, trade, and sales assets abroad,” Lukoil said Monday.

Analysts at Moscow-based financial services firm Finam attributed the profit decline to 109 billion rubles in deferred tax liabilities, following Russia’s decision to impose a 25% corporate income tax rate starting in 2025.

Lukoil shares fell by nearly 1% for three consecutive days on the Moscow Stock Exchange (MOEX) after the earnings report was published.

On Tuesday, Lukoil’s board recommended a dividend payout of 541 rubles per share based on 2024 results, with June 3 proposed as the cut-off date for determining eligible shareholders.

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