OREANDA-NEWS. February 04, 2010. Rosneft released its 4Q09 and FY09 US GAAP financials. Both 4Q revenues and EBITDA adhered close to the consensus, with net income at 7% below consensus, which we attribute to a higher effective income tax rate, reported the press-centre of OTKRITIE Financial Corporation.

The company showed a 4Q09 net income of US1.67bn (vs. consensus of US1.8bn), and EBITDA of USD 4.01bn (vs. consensus of US3.92bn) on net revenues of USD 14.57bn (vs. consensus of US 14.53bn). We explain the 7% earnings miss in 4Q09 primarily as a function of a 32% effective income tax rate. Most forecasters had probably expected this tax rate to normalize faster to the statutory 20% rate, after a steep increase from 6% in 1Q, to 20% in 2Q, to 38% in 3Q. Otherwise, we found no surprises in the reported financials.

View: We maintain our view that the stock’s near-term performance will be driven mainly by news flow on the Vankor export duty exemption. On 1 February, Rosneft VP Peter O’Brien was quoted by Bloomberg as saying that the company assumes the Vankor tax exemption will stay in place for three years, despite recently voiced concerns that it may be scrapped as early as March 2010.

Recommendation: We maintain a BUY rating on Rosneft and our target price of US 10.77/share.