Sibneft 1st quarter profits-and tax liability--soar

Sibneft is reporting net, unconsolidated profits for the first quarter of 2004 of approximately USD 309.4 million, up from approximately USD 122.4 million in the fourth quarter of 2003. The figure for the first quarter of 2003 was approximately USD 15.5 million. The quarterly spurt was attributed in the company to an increase in sales and in variety of products. For all of 2003, Sibneft reported net profits of approximately USD 98 million.

In the view of the analysts of Aton, the very substantial increase in profits reflects Sibneft's rejection of tax-minimization schemes and inclusion of larger portions of its profits on its own books, rather than on those of subsidiaries. 'This is positive news for Sibneft in that these Russian-accounting-standard results show that the company wants to cooperate with the government, which wants to increase tax receipts from the oil and gas sector,' Aton's report said. In terms of fundamentals, according to Aton, Sibneft remains fully priced. The analysts again noted that Sibneft has slowed its extraction rate recently.

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