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Gazprom profit down to $5.6 billion, operating costs up

Staff Writer | August 10, 2016
Gazprom reported that its first-quarter net profit slipped 5% to 362 billion rubles ($5.6 billion) despite an increase in revenue, as operating expenses rose.
Gazprom
Oil exploration   Sales revenue in Russia rose 2%
Revenue increased by 5% to 1.74 trillion rubles. Gas sales volume to the company's most-lucrative European market jumped 49% to 58.1 billion cubic meters, but sales revenue from the region rose only 22% as the average price fell.

Sales revenue in Russia rose 2% to 292 billion rubles, even though sales volume slipped 6%.

Operating expenses for the quarter were up 24% to 1.45 trillion rubles. The company said this rise was mainly caused by increased expenses for gas relating to an asset-swap agreement between Gazprom and Wintershall, a unit of German conglomerate BASF.

Gazprom's bottom line was also hit by a foreign-exchange loss of 25 billion rubles as the ruble weakened compared with a year earlier.

Net sales of gas increased by RUB 71,245 million, or 7%, to RUB 1,072,854 million for the three months ended March 31, 2016 compared to the same period of the prior year.

Net sales of gas to Europe and Other countries increased by RUB 120,183 million, or 22%, to RUB 663,176 million for the three months ended March 31, 2016 compared to the same period of the prior year.

This was mainly driven by the increase in volumes of gas sold by 49%, or 19.0 bcm, which was partially compensated by the decrease in average Russian Ruble prices (including excise tax and customs duties) by 22%.

Net sales of gas to Former Soviet Union countries decreased by RUB 38,703 million, or 25%, to RUB 116,935 million for the three months ended March 31, 2016 compared to the same period of the prior year.

The change was due to the decrease in volumes of gas sold by 16%, or 2.0 bcm, and the decrease in average Russian Ruble prices (including customs duties) by 13%.


 

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