OREANDA-NEWS. August 17, 2010. Surgutneftegaz released its detailed RAS financial statements for 1H10 last week, revealing reported 6-month net income of USD1,865m (RUB56.05bn) versus USD 2,322m (RUB77.26bn) a year ago, reported the press-centre of OTKRITIE Financial Corporation.

Revenues increased from USD 6,999m (RUB232.86bn) in 1H09 to USD 9,193m (RUB276.28bn) in 1H10. Surgutneftegaz showed a rise in net income from USD 281m in 1Q10 to USD 1,576m in 2Q10, which we believe was partly due to forex gains. We estimate that the company’s net cash position increased by about USD 0.23bn in 2Q, from USD 21.16bn at the end of March 2010 to USD 21.39bn at the end of June 2010. 

View: We believe Surgut’s 1H10 RAS results will have no visible impact on the share price performance. The company already released its net income figure for 1H10 a few weeks ago, and we find little surprising in the net cash increment reported for 2Q10. 

Valuation and Action: We maintain our SELL rating on Surgutneftegaz, with a target price of USD 0.80/share.