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Gazprom Reports Record $10.6 Billion Quarterly Profit, Beating Estimates
OAO Gazprom, the world’s biggest natural-gas producer, tripled first-quarter profit to a record after cold weather boosted demand at home and in Europe and the ruble appreciated against the dollar.
Net income climbed to 325 billion rubles ($10.6 billion) from 103.7 billion rubles a year earlier, the Moscow-based company said today on its website. That beat the average estimate of 316.4 billion rubles in a Bloomberg survey of six analysts.
Gas sales, hurt by the economic crisis last year, were supported by low temperatures at home and in Europe this year. Gazprom, Russia’s gas export monopoly, boosted sales volumes 21 percent to 162.2 billion cubic meters in the first quarter, the company said.
“The most interesting thing for Gazprom this year will be how the situation with the mineral extraction tax on gas is resolved,” Alexei Kokin, an analyst at IFC Metropol, said by phone.
The Finance Ministry is seeking to boost oil and gas taxes after Russia had its first budget deficit in a decade last year. The gap may reach 2.4 trillion rubles this year, or 5.4 percent of gross domestic product.
Foreign Exchange Gain
Sales rose 14 percent to 956.8 billion rubles and operating profit gained 20 percent to 339.3 billion rubles, Gazprom said. Earnings before interest, taxes, depreciation and amortization rose 21 percent to 407 billion rubles, Kokin said.
Gazprom had a net foreign exchange gain of 59.3 billion rubles in the first quarter against a loss of 140 billion rubles a year earlier. Net debt fell 29 percent to 977.3 billion rubles in the first quarter.
Gas prices climbed 34 percent in Russia, Gazprom’s biggest market by volumes, while falling 27 percent in Europe. Russia is gradually raising rates, aiming to make domestic sales as profitable as European exports. This boosted revenue at home 47 percent, compared with a 22 percent drop in Europe, Gazprom said.
Gazprom received 9.5 billion rubles as its share of earnings from the Sakhalin Energy Investment Co., which started Russia’s first liquefied natural gas shipments last year, becoming profitable. Gazprom bought a 50 percent stake plus one share from Royal Dutch Shell Plc, Mitsubishi Corp., and Mitsui & Co. in 2007.
This is the first quarter for which Gazprom used a new methodology, reporting net trading activity, as it did for its full-year 2009 report. Gazprom is the last of Russia’s major oil and gas companies that reports under international standards to publish first-quarter results.
To contact the reporter on this story: Anna Shiryaevskaya in Moscow at ashiryaevska@bloomberg.net
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