Profits of Russian gas giant plummet.

Gazprom announced that its net profit last year fell by more than 40%, and that it will only pay dividends for the first half of 2022.

Gazprom announced on May 23 that its net profit last year fell by more than 40%, to 1.226 trillion rubles (US$15.7 billion). This was due to Russia's increase in oil and gas taxes in the second half of 2022.

Gazprom shares fell 4% yesterday after the company announced its board of directors decided to pay only 1.2 trillion rubles as dividends for the first half of 2022. "We assess the business results as weak. Furthermore, the board of directors did not announce a dividend payment plan for the second half of 2022. In our view, this information is disappointing," Sinara Investbank commented.

Gazprom Deputy Director Famil Sadygov said that because the half-year dividend payout exceeded the target of 50% of net profit, they decided not to pay a full year dividend. Sadygov also said that the company's earnings before interest, taxes and depreciation 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 due to the military campaign in Ukraine. Gazprom's gas exports were not directly sanctioned. However, export volumes also halved, falling to 101 billion cubic meters in 2022.

In the first half of last year, they posted a net profit of 2.5 trillion rubles (US$34 billion) thanks to high gas prices on the international market due to concerns about supply disruptions. Gazprom CEO Alexei Miller said they paid 5 trillion rubles in taxes to the government and local authorities last year.

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

However, Reuters suggests that 2023 could be more challenging, given the drop in global gas prices. The amount of gas they are delivering to Europe is also significantly less than it was at the beginning of last year.

As the West restricts its purchases of Russian gas, Gazprom has recently shifted its focus to the Asian market. In March, Gazprom announced that it had set a record for the daily volume of gas supplied to China via the Power of Siberia pipeline.

Ha Thu (according to Reuters, AFP)

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