By Leman Mammadova
The net profit of the state oil company SOCAR amounted to 1.22 billion manats ($0.7 billion) in 2018.
According to the company's consolidated financial report for 2018, SOCAR’s net profit decreased by 41.5 percent compared to 2017. Thus, a year earlier it amounted to 2.09 billion manats ($1.2 billion).
However, the total revenues of SOCAR amounted to 111.2 billion manats ($65.4 billion) with an increase of 20.1 percent compared to 2017.
The company managed to work with gaining profit despite the fact that the exchange rate volatility led to an increase in costs.
The increase in the company's expenses is also associated with an increase in the tax burden that almost doubled as a result of an increase in the company's share in the development of the Azeri-Chirag-Gunashli field (ACG).
As is known, after the signing of the re-developed agreement, the company's share also increased more than twofold, from 11.65 percent to 25 percent.
SOCAR’s revenue amounted to 58.5 billion manats ($34.4 billion) from the sale of crude oil in the reporting period, and 40.1 billion manats ($23.6 billion) - of oil products.
“In 2017-2018, SOCAR restored its financial indicators to the pre-crisis level, preceding the period of falling world oil prices, and today it works by getting profit,” said SOCAR President Rovnag Abdullayev.
In his words, the rising prices in the world oil markets, commissioning of the Star refinery and polypropylene production plant, which ensured growth in profits from the sale of petrochemical products, as well as the increase in the sales of natural gas within the Shah Deniz-2 project, led to the fact that SOCAR managed to achieve a positive balance.
“In the coming years, we will try to maintain this positive dynamics through the completion of new projects and their rational exploitation,” he noted.
According to the report, the total assets of SOCAR amounted to 62.1 billion manats ($36.5 billion) last year, and the total debt obligations - to 13.7 billion manats ($8 billion).
SOCAR's total capital increased compared to the previous year and reached 24 billion manats ($14.1 billion). SOCAR’s total revenues over the past 10 years have increased 24 times, and total capital - more than thrice.
As for the operations in Switzerland in 2018, the revenues of SOCAR amounted to 94.5 billion manats ($55.6 billion), which is 20.2 percent more than in 2017. According to the report, 84.9 percent of the company's total revenue last year accounted for revenues from operations in Switzerland. In the country, SOCAR operates in the retail trade of petroleum products, running a network of petrol stations under the SOCAR brand.
In 2018, the revenues of SOCAR from operations in Azerbaijan amounted to 6.6 billion manats (23.1 percent up), in Turkey – 4.9 billion manats (0.9 percent up), in the United Arab Emirates – 2.3 billion manats (77.6 percent up), in Georgia – 1.1 billion manats (5.2 percent down), and in other countries – 1.6 billion manats (44.5 percent up).
SOCAR is one of the world's 50 largest oil companies. Established in 1992, SOCAR aimed at manage Azerbaijan's oil resources on the basis of a single state policy, to improve the management structure of the oil industry and to ensure the development of fuel and energy complex.
Three production divisions, one oil refineries and one gas processing plant, a deep water platform fabrication yard, two trusts, one institution, and 23 subdivisions are operating as corporate entities under SOCAR. SOCAR has a significant position in a number of regional and international energy projects.
Currently, SOCAR is the only producer of oil products in the country, and also operates more than 370 filling stations in Switzerland, Georgia, Romania and Ukraine.
Leman Mammadova is AzerNews’ staff journalist, follow her on Twitter: @leman_888
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