Page 172 - RusRPTJun24

9.2 Major corporate news 9.2.1 Oil & gas corporate news
● Gazprom
Gazprom reported an increase in supplies to China by 37.4%. The volume of gas supplies to China via the Power of Siberia gas pipeline from January 1 to May 12 exceeded the same period in 2023 by 37.4%. In April of this year, the increase compared to last year's April was 57.1%.
Gazprom reports nearly $6.9 billion in net losses in 2023. The state-owned Russian energy giant Gazprom reported a net loss of 629 billion rubles (nearly $6.9 billion) in 2023, the company's largest profit downturn in decades amidst falling gas prices and a limited European market.
Gazprom is selling noncore assets to get some cash after its disastrous results. The situation for Russia's former crown jewel, Gazprom, is worse than only the $6.9bn deficit resulting from last year. "Gazprom is engaged in a fire sale. They had their worst year in decades, and their production has fallen precipitously, down to what it was in the 1970s," said Tom O'Donnell, an energy and geopolitical analyst based in Berlin. "This is a result of a miscalculation by Putin," he told Newsweek." The Russian attempt to sell natural gas to China has been considered useless even before Putin's begging travel to Beijing. Gazprom CEO, Alexei Miller, was not even part of the delegation. Europe was the most lucrative market and China pays far below the market price, let alone buying only a fraction in quantity.
Russia to increase taxes on struggling energy giant Gazprom this year. Gazprom’s revenue fell by 30% last year with a net loss of $6.9 billion, the largest in 25 years. Russia’s full-scale invasion of Ukraine led to worsening relations with Europe, limiting the operations of the company.
The net loss for 2023 amounted to RUB 0.58 trillion (in 1H23 there was a profit of RUB 0.33 trillion, the Interfax consensus for 2023 was RUB 0.45 trillion). The main reason for this result was, apparently, the creation of provisions for impairment of non-financial assets. With adjustments, the dividend base will be positive, but the reported debt/EBITDA ratio at the end of the year, calculated using management’s methodology, is now 2.96x versus the expected 2.3x in December 2022. This is more than the 2.5x threshold and, accordingly, the company's board of directors may recommend reducing the dividend payment for 2023 from 50% of the adjusted dividend base. From a credit analysis point of view, a significant reduction in dividend payments will be positive for the issuer's credit profile.
172 RUSSIA Country Report June 2024 www.intellinews.com