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Gazprom posts 7% decline in net profit

29 April 2014

Russian gas giant Gazprom today posted a 7-per cent decline in its net profit in 2013, even as natural gas sales to its main market Europe increased, the company said today, AFP reported.

The company's net income of 1.139 trillion roubles ($31.6 billion) came in slightly lower than expected by Alfa Bank analysts.

Total sales were up 10 per cent to 5.250 trillion roubles, boosted higher sales of natural gas to Europe.

Sales to the former Soviet states, of which Ukraine was the biggest market, had declined  20 per cent to 420.3 billion roubles.

Net profit was down for the second consecutive year following a 10-per cent decline in 2012 which saw Russian energy giant lose the status of the world's most profitable company.

Meanwhile, Gazprom has come under pressure from the EU and Ukraine as they seek new sources of natural gas supplies and relations with Russia sink to the worst level after Cold War, Bloomberg reports.

The US and EU are targeting companies whose executives and officials close to Russian president Vladimir Putin with sanctions, the latest being OAO Rosneft, the state-controlled crude producer yesterday.

''Political and economic tensions between Russia and Ukraine have caused renewed concerns regarding the reliability of gas supplies to Europe through Ukraine,'' Gazprom said today in its management discussion report. ''Any disputes with Ukraine could potentially lead to a disruption of the Gazprom group's exports to Europe through pipelines crossing Ukraine.''

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