Gazprom Q1 Profits Hit by Lower Prices

Russian state Gazprom saw its profits fall in Q1 2017 compared with the same period of last year, owing partly to lower gas prices in Europe. The fall would have been bigger year on year but it sold more gas, and its oil and oil products sales were also up, thanks to higher prices.

Pre-tax profit was rubles 454.048bn ($8bn), down from 5.7% from last year's rubles 481.960bn.

Net sales of gas of rubles 1.008 trillion ($17.8bn) were 6% lower than the same period in 2016. Net sales of gas to Europe and Turkey fell 10% to rubles 593.879bn ($10.5bn). This was mainly driven by the decrease in average ruble prices (including excise tax and customs duties) by 20%, that was partially compensated by a 13% increase – 7.5bn m³ – in the amount sold, it said. The average price was $198.3/'000 m³ ($5.51/mn Btu).

Net sales of gas to former Soviet Union countries fell 13 %, to rubles 102.135bn. Again, the change was due to the lower Russian ruble prices – including customs duties – by 23%, while sales rose by only 15%, or 1.6bn m³. The average price was $160.8/'000 m³ ($4.47/mn Btu).

Sales at home fell 7% to rubles 312.255bn, despite selling 8% more gas, or 6.3bn m³, while prices fell just 1%. The average price was $67.4/'000 m³

Net sales of refined products rose 6%, to rubles 393.663bn as the average price was higher and Gazprom also sold more. Crude prices were also up, and sales rose 84%, to rubles 138.837bn. Also on the negative side, operating expenses rose 4% to rubles 1.5 trillion.

William Powell