Ukrnafta doubles EBITDA, net income yoy in 1H12

Ukrnafta (UNAF UK) reported a 3% yoy increase in revenue to USD 1,668 mln in 1H12, despite a 5% decline in oil production over the period. EBITDA grew 97% yoy to USD 286 mln, and net income advanced 106% yoy to USD 180 mln.

Roman Dmytrenko: We estimate the company economized USD 135 mln on a 30% oil production royalty decrease since the beginning of 2012, which was directly translated to USD 139 mln (95% yoy) growth in EBITDA in 1H12. We believe the positive impact of the royalty decrease on the company’s financials will fade by the end of 2012 as Ukrnafta continues to demonstrate negative production growth due to low resource replenishment.