Gazprom’s 2019 full-year net profits dropped 17% year-on-year, on the back of lower prices and sales volumes to Europe, Kallanish Energy reports.
The Russian gas giant reported on Wednesday a net profit attributable to shareholders of 1.2 trilion rubles. Its total sales revenues (net of tax, VAT and customs) were down 7% year-on-year, led by fewer purchases from European buyers.
Gazprom’s head of finance Alexander Ivannikov said in a presentation gas production rose 1% y-o-y to 501 billion cubic meters (Bcm) of gas in 2019. He also said the company exported 199 Bcm of gas at an average price of $211 per thousand cubic meter (Mcm) in Europe.
Data from Gazprom’s financial results report show gas sales to Europe and other countries – which include Turkey – totaled 232.4 Bcm last year. This is a 4.5% increase over 2018’s sales. The region’s average sales price in rubles declined 12%, while prices in U.S. dollar dropped around 15%.
Sales to the Former Soviet Union countries were up 2.6% at 38.7 Bcm. The average price for the gas sold in this market was $157/Mcm in 2019, compared to $163/Mcm in 2018.
Domestic gas sales in Russia were down nearly 2% at 235.8 Bcm, but prices were up 3.43% y-o-y at 4,118.2 rubles/Mcm.
Ivannikov said the “softer” financial performance was expected, given a 44% decline in European spot gas prices – which was the “key negative driver” to Gazprom’s results.
The company’s gas prices were higher than the TTF hub spot prices, but there were also unfavorable weather conditions and weaker ruble exchange rates, he said.
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