Gazprom Profits Fall with Higher Expenses
Russian giant Gazprom 2017 net profit fell to less than a quarter of its 2016 profit, at rubles 100.298bn ($1.744bn), it said April 2. Despite the plunge in profits, according to the company's accounting report under Russian Accounting Standards (RAS), its revenue – excluding value-added tax, excises and mandatory payments – rose by 9.6%, to rubles 4.3 trillion. Throughout 2017, Gazprom had a negative cash flow. According to Fitch, this situation will continue for some years.
Additionally, the company announced its 1Q 2018 operational report without a financial statement. Gas production rose 5.4% to 133.8bn m3 compared with 1Q 2017; in March, Gazprom produced 46.5bn m3 which was a six-year record for one month's output.
Exports to Germany rose 12.2%; to France, 11.1%; to Austria, 83.5%; to the Netherlands, 127%; and to Finland, 15.5%.
In the first three months of this year, the Russian gas holding increased export deliveries of fuel to foreign countries by 6.6%, to 54.4bn m3, compared with January-March 2017. Last month, Gazprom set an absolute record of supplying gas to former Soviet Union (non-FSU) countries: 19.6bn m3. Exports to these countries had amounted to 17.4bn m3 in February.
Gazprom's total investments in 2018 will total rubles 1,278.83 bn ($22.2bn at current exchange rates), the first time its planned annual investments will have topped a trillion rubles. The three major projects – Nord Stream 2, Power of Siberia and TurkStream – will cost the gas giant about $20-25bn in total.