Gazprom posts first loss in more than 20 years

(Patria) - Russian gas giant Gazprom has recorded its first annual loss in more than 20 years, after gas sales more than halved compared to the period before the invasion of Ukraine.

The Kremlin-owned company posted a net loss of 629 billion rubles (6.3 billion euros) last year, due to declining gas trade with Europe, once Gazprom's main sales market, reports Index.

The results highlight the dramatic decline of the company, which has been one of the most powerful in Russia since the collapse of the Soviet Union, and its gas reserves were often used as leverage in disputes with neighbors such as Ukraine and Moldova, writes The Guardian.

Analysts had expected net income of 447 billion rubles, according to the Interfax news agency.

According to a Reuters analysis, it was Gazprom's first annual loss since the late 1990s/early 2000s, when Alexei Miller, an ally of then-newly appointed President Putin, took over the company in 2001.

Gazprom's loss in 2023 followed a net profit of 1.2 billion rubles the previous year. The company, now headquartered in St. Petersburg, suffered large losses in the late 1990s after accumulating foreign currency debt, inflated in rubles due to the 1998 financial crisis.

Gazprom shares in Moscow fell by about 4 percent yesterday. Russian gas exports to Europe, once its primary export market, have declined due to the political consequences of the conflict in Ukraine.

Gazprom, which has a monopoly on gas transportation abroad, is the most tangible victim of Western sanctions.

In mid-2022, Gazprom began limiting gas supplies to Europe through its Nord Stream 1 pipeline, and in September announced it was indefinitely shutting down the pipeline from Siberia to northern Germany across the Baltic Sea.

The following month, the pipeline was damaged by underwater explosions, the cause of which is still being investigated by German investigators.

While the disruption pushed gas prices to near-record levels, European countries were more successful than expected in finding alternative supply sources, with the US and Qatar helping to fill storage on the continent.