(Bloomberg) -- Lukoil PJSC reported its highest annual net income in at least seven years following a surge in energy prices.

Russia’s second-largest oil producer follows domestic rivals Rosneft PJSC and Gazprom Neft PJSC in reporting strong earnings and cash flow, signaling a potential hike in shareholder returns. Robust results were also supported by higher output after OPEC+ eased production curbs with demand recovering from the impact of the pandemic. 

Lukoil’s net income reached 773.4 billion rubles ($6.9 billion) in 2021, 50 times more than the previous year. Fourth-quarter profit was 233.8 billion rubles, a record high, the company said in an earnings report Wednesday, a day earlier than planned. 

Free cash flow -- the basis for calculating dividends -- reached 693.6 billion rubles in 2021, the second-highest in at least seven years. 

Lukoil has pledged to pay out the equivalent of at least 100% of its adjusted free cash flow. Total free-cash flow suggests a dividend for the full year in the range of around 915 rubles a share, BCS Global Markets analyst Ron Smith said in an emailed note, following the report. Lukoil has already agreed to an interim dividend of 340 rubles a share. 

The earnings performance will not reflect in share prices. Trading has been halted in Moscow after a crushing decline of Russia’s financial markets following international penalties for the war in Ukraine. 

On Feb. 28, the last day the shares traded, Lukoil’s stock closed 4.5% lower at 4,921 rubles. The shares had slumped as much as 50% on Feb. 24, the most in two decades, after Russian troops invaded its neighboring country.

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