Gazprom profit jumps only 49%

Energy Trade

OAO Gazprom, the world's largest natural-gas producer, said profit jumped 49% last year on higher prices and sales in Europe, less than analysts expected. The shares fell. Net income rose to 315.9 billion rubles ($11.8 billion), from 211.7 billion rubles a year earlier, the company said on its Web site today. That's less than the median estimate of 349 billion rubles in a Bloomberg News survey of seven analysts. The results are to International Financial Reporting Standards. Revenue advanced 43% to 1.4 trillion rubles, more than the 1.28 trillion rubles expected in the survey, on higher prices in Europe, where Gazprom has a quarter of the market. The stock slipped 2.4% to $10.35 at 12:27 p.m. in Moscow. Russian President Vladimir Putin is seeking to turn Gazprom, which controls about a fifth of the world's known gas reserves, into an energy company big enough to compete with Exxon Mobil Co. Last year Gazprom bought Roman Abramovich's OAO Sibneft for $13.1 billion to boost its output of oil. It is now picking foreign partners for a $20 billion offshore project in the Arctic to supply liquefied natural gas to the U.S. Gazprom said European sales rose 38% to 619.1 billion rubles as the average price climbed to $202.54 per 1,000 cubic meters, versus $147.60 a year earlier. Sales rose just 2% by volume, to 156.1 billion cubic meters. State-run Gazprom, the sole exporter of Russian gas, sells the fuel at home at a loss because the government caps prices to subsidize businesses and homes and help contain inflation. The company said it sold gas in Russia at an average $37.73 per 1,000 cubic meters last year. Operating costs rose 30% last year. Debt rose 60 percent, to 797.5 billion rubles, mostly due to borrowing to purchase oil Sibneft, the statement said. (Bloomberg)

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