Russian gas giant's profits fall sharply

Gazprom announced a more than 40% drop in net profit last year, and will only pay dividends for the first half of 2022.

Gazprom said on May 23 that its net profit last year fell more than 40% to 1.226 trillion rubles ($15.7 billion), due to Russia raising oil and gas taxes in the second half of 2022.

Gazprom shares fell 4% yesterday after the company announced that the board of directors decided to pay only 1.2 trillion rubles in dividends for the first half of 2022. "We assess the business results as weak. In addition, the board of directors did not announce plans to pay dividends for the second half of 2022. In our opinion, this information is disappointing," Sinara Investbank commented.

Gazprom Deputy Director Famil Sadygov said that because the half-year dividend payment exceeded the target of 50% of net profit, they decided not to pay it for the whole year. Sadygov also said that the company's earnings before interest, taxes, depreciation and amortization reached 3.6 trillion rubles last year, the same as in 2021.

Last year, the West imposed a series of sanctions on Russia and its state-owned companies over its military campaign in Ukraine. Gazprom’s gas exports were not directly sanctioned, but they were halved to 101 billion cubic meters in 2022.

It posted a net profit of 2.5 trillion rubles ($34 billion) in the first half of last year, helped by soaring gas prices on international markets amid fears of supply disruptions. Gazprom CEO Alexei Miller said the company paid 5 trillion rubles in taxes to the government and local authorities last year.

This figure contributes nearly 20% of Russia's budget revenue. Gazprom is currently the world's largest natural gas producer and is also one of Russia's largest tax revenue contributors.

However, Reuters said 2023 could be more difficult, as global gas prices have fallen. The amount of gas they deliver to Europe is also much less than at the beginning of last year.

As the West restricts its purchases of Russian gas, Gazprom has recently turned to the Asian market. In March, Gazprom said it had set a record for daily gas deliveries to China via the Power of Siberia pipeline.

Ha Thu (according to Reuters, AFP)

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