Rosneft (ROSN): a metric-by-metric breakdown

Rosneft is read not through its earnings multiple but through the link between debt, capital expenditure and the base from which the dividend is calculated: for a state-controlled company with a heavy investment programme and revenue that depends on the export price and the tax regime, net profit is the most volatile line of the accounts and the one that exists most "on paper". That is why the order in which you go through the ROSN card is better reversed: the debt burden and cash flow first, valuation afterwards.

What to look at first in the card

The valuation multiples for the stock are 14,07, no data and no data. For an oil producer, it is the third that carries the most information: EV/EBITDA includes debt in the numerator and takes as its denominator earnings before interest, income tax, depreciation and amortisation — that is, the part of the result that is less distorted by foreign-exchange revaluations and non-recurring write-offs. Rosneft's earnings multiple jumps around for reasons that have nothing to do with production: revaluation of foreign-currency debt, asset impairments, stakes in joint ventures. Comparing 14,07 with the multiple of a bank or a retailer is pointless — the comparison works only within the industry, and the closest neighbour in terms of business logic here is Gazprom, not Sberbank.

Return on equity 3,21 % is useful as a long series rather than as a single point: an isolated year of high oil prices lifts it, a year of write-offs sends it tumbling.

Debt: why it is the first link in the chain

Net debt no data and the ratio no data determine how much room the company has left after servicing its obligations. The mechanism is direct: when the key rate is high, it is not the whole of the debt that becomes more expensive at once, but the part that is being refinanced or is tied to a floating rate — so interest expenses rise with a lag and keep rising even after rates have turned downwards. This eats into the profit from which the dividend is calculated, with revenue no data unchanged and production unchanged.

The second channel is prepayments under long-term oil supply contracts. Economically this is debt financing, but it is not always accounted for as debt, so the formal no data can look milder than the real burden. This has to be checked in the notes to the financial statements in the issuer reports section, not from the summary metric.

Capital expenditure and Vostok Oil

no data is the key to why profit and cash diverge at Rosneft. The Vostok Oil project on the Taymyr Peninsula requires infrastructure built from scratch: a pipeline, a port, power generation, a fleet. While construction is under way, capital expenditure is deducted from operating cash flow and weighs on 1 023 000 000 000, whereas the return comes later and depends on the launch dates, which have been pushed back. The platform does not store a separate metric for the project: it is visible indirectly — through the trend in no data and through management's wording in the reports and in the news flow.

The practical conclusion: with capex rising, a gap between 293 000 000 000 and 1 023 000 000 000 is the norm, not a warning sign. The warning sign is when that gap is accompanied by a rise in no data.

Dividends: what the payout is calculated from

Rosneft's dividend policy is tied to net profit under IFRS, not to free cash flow. The difference is fundamental: the company can pay in a year when almost no cash is left after construction, funding the payout with debt — and, conversely, not pay despite strong cash flow if profit has been knocked down by write-offs. The actual share paid out can be seen in no data, the current yield in 0,58 %. The yield is calculated from the price, so a rise in it can mean either a generous payout or a stock that has become cheaper; it must not be read in isolation from no data.

The dates and amounts of the nearest payouts are

And the full list for the market is in the dividend calendar. The procedure for determining the tax base for investment income is 13%.

The tax and external framework

Between revenue and profit at Rosneft there is a layer of levies that most other issuers on the Russian equity market do not have: the mineral extraction tax (Chapter 26 of the Russian Tax Code), the tax on additional income for some of the fields (Chapter 25.4 of the Russian Tax Code), the excise and the reverse excise on crude feedstock with the damper premium for refining. The parameters of these mechanisms are changed by law, and a change in the formula affects no data more strongly than a movement in production does. Add the OPEC+ quotas, which limit volume, and the discount of the Urals grade to the benchmark grade, which sets the selling price — the platform does not provide a separate metric for the discount, so it has to be tracked through the news and the financial statements.

The order of checks

Step 1 — debt: no data and no data, then the notes on prepayments. Step 2 — cash: 1 023 000 000 000 against no data. Step 3 — valuation: no data compared with industry peers, not with the market as a whole. Step 4 — payout: no data and then 0,58 %; events for the stock are in the events calendar.

Definitions of the multiples and of reporting terms are in the glossary.