Lundin Petroleum has warned of impending costs that will impact profitability in its second-quarter result, with a sizeable foreign exchange loss to do the most damage.
The Swedish independent said on Tuesday that it expects to book a foreign exchange loss of around $153 million in the three-month period to the end of June.
This is due to the weakening of the Norwegian kroner against the US dollar by 5% and a weakening of the euro against the dollar by 9%.
“The foreign exchange loss mainly relates to the revaluation of loan balances at the prevailing exchange rates at the balance sheet date,” Lundin said.
The company also expects to book pre-tax exploration costs of around $6 million. However, this will be largely offset by a tax credit of $5 million.
All of the costs are, however, largely non-cash items and will no impact operating cash flow or earnings before interest, tax, depreciation and amortisation.
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