Russia's largest private oil firm Lukoil said yesterday a slide in oil prices has caused a big leak in profits, which are down by more than half in the first quarter. Net profit dropped to 43 billion rubles ($654 million), a 59 percent fall year-on-year, a worse performance than analysts had predicted.

Lukoil said EBITDA (earnings before interest, taxes, depreciation and amortization), a measure of underlying profitability, also fell by 32 percent to 145 billion rubles. The ruble's recent collapse, while boosting revenues, weighed on the cost side, as the company's obligations denominated in foreign currencies became more expensive to meet. Excluding exchange rate factors, Lukoil would have limited the profit fall to 20 percent, it said.

Lukoil's revenues fell by 18 percent as falling oil prices, which early this year hit their lowest level since 2003, took their toll. The oil price has since recovered partially from its 18-month long downturn. But Lukoil also said its massive investment to reverse a decline in its output was starting to pay off, allowing it to somewhat offset falling prices per barrel with increased production volumes.

Lukoil's oil production increased by 0.5 percent to the equivalent of an average of 214 million barrels of oil in the first quarter, it said.