OAO Gazprom, the world’s biggest natural gas producer, said profit slumped 9.5 percent last year, the first decline in more than a decade, as European demand fell and operating expenses jumped.
Net income fell to 1.18 trillion rubles ($38 billion) from 1.3 trillion a year earlier, the Moscow-based company said in a statement today. Revenue rose 2.7 percent to 4.76 trillion rubles, as higher gas prices compensated for declining exports.
Gazprom, which supplies a quarter of Europe’s demand, reduced shipments to its traditionally most profitable market by 3.6 percent, while sales volumes also fell at home and in the former Soviet republics, according to the report. The last time Gazprom posted a drop in full-year net income was 2001.
Operating expenses surged 18 percent to 3.48 trillion rubles because of a jump in oil and gas purchases, the mineral extraction tax, and staff costs.
Gazprom recognized 102.7 billion rubles in retroactive payments to European customers last year. The company had booked 133.2 billion rubles of discounts in the first half, and said in its nine-month report that it expected a profit tax rebate of 30.4 billion rubles.
Shares traded little changed at 122.35 rubles by 11:11 a.m., erasing gains of as much 0.6 percent.