Gazprom swung to a loss over nine months under Russian accounting standards

Russian gas giant Gazprom reported a loss of 309 billion roubles (CZK 74.1 billion) for the first nine months of this year, compared with a profit of 446 billion roubles in the same period last year. The company did not explain the reason for the loss, Reuters reported. The results are based on Russian accounting standards, which do not include subsidiaries.

Revenue increased by eight percent to 4.3 trillion roubles. Gross profit fell by nine percent to 838 billion roubles. In the third quarter alone, however, the company reported a profit of 171.53 billion roubles. The previous two quarters had been loss-making.

Gazprom has the world’s largest natural gas reserves and a monopoly on exports of this strategically important commodity from Russia via its pipeline network. The Kremlin controls the company.

Gazprom also said it would increase its investment programme this year to 1.64 trillion roubles. The company had originally planned investments of 1.57 trillion roubles.

Gazprom calculates dividends based on the group’s consolidated net profit under international accounting standards. This profit also includes its oil, energy and liquefied natural gas divisions. Last year, the company reported a loss of 629 billion roubles on this basis. It was the company’s first full-year loss since 1999. The company’s performance last year was hit by a sharp drop in gas sales to Europe, resulting from Russia’s invasion of Ukraine in February 2022. Europe was Gazprom’s largest market before the Russian invasion of Ukraine. The company is seeking to offset the decline in exports to Europe by increasing supplies to China.

Dmitry Sergeyev, chief investment adviser at Veles Capital, told the Vedomosti newspaper that Gazprom’s financial results this year could be comparable to those in 2023. In his view, without a resumption of exports to Europe or the launch of the Power of Siberia 2 pipeline, the company will find it difficult to return to strong financial results.