Gazprom net profit jumps 71 per­cent thanks to weak ru­ble

The China Post - - BUSINESS INDEX & -

Rus­sian gas gi­ant Gazprom said Mon­day its net profit surged 71 per­cent in the first quar­ter as a weak ru­ble com­pen­sated for de­clin­ing sales and lower energy prices.

The net profit of 382 bil­lion rubles (US$5.9 bil­lion) com­pared with 223 bil­lion rubles in the first quar­ter of 2014, the com­pany said in a state­ment.

Gazprom ac­knowl­edged that the re­sult was partly at­trib­ut­able to the “in­crease in av­er­age prices in ru­ble terms.”

Most of Gazprom’s costs are in the bat­tered Rus­sian cur­rency, while most of its rev­enues are in U.S. dol­lars or eu­ros.

The ru­ble lost nearly half its value in 2014 but slightly re­cov­ered af­ter energy prices sta­bilised. A re­cent slump in energy prices, how­ever, last week saw the Rus­sian cur­rency hit its weak­est level against the U.S. dol­lar since Fe­bru­ary.

The profit fig­ure ex­ceeded an­a­lysts’ pre­dic­tions av­er­ag­ing 347 bil­lion rubles for the Jan­uary-to-March pe­riod, In­ter­fax news agency re­ported.

But while sales rev­enues were up, Gazprom’s op­er­at­ing prof­its dropped by 3.0 per- cent to 459 bil­lion rubles and sales vol­ume was down 10 per­cent to 132.3 bil­lion of cu­bic me­ters (bcm).

Rus­sia’s econ­omy has slumped into re­ces­sion on the back of lower oil prices and Western sanc­tions over the Ukraine cri­sis.

The coun­try’s econ­omy min­istry said last month it ex­pected Gazprom’s pro­duc­tion to drop to 414 bil­lion bcm this year, which would be an all-time low.

Gazprom has re­cently en­coun­tered dif­fi­cul­ties with some of its part­ners, in­clud­ing con­flict-hit Ukraine.

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