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Gazprom announced a 5% fall in net profits in the 1st quarter of 2016

Gazprom reported its 1st-quarter net profit slipped 5% to 362 billion roubles ($5.6 billion) despite an increase in revenue, as operating expenses rose.


Gazprom reported on August 10, 2016,  its 1st-quarter net profit slipped 5% to 362 billion roubles ($5.6 billion) despite an increase in revenue, as operating expenses rose.

 

Analysts expected Gazprom to report a 361.2 billion rouble net profit, compared to 382.1 billion roubles in the first quarter of 2015.

The company's revenue rose to 1.74 trillion roubles from 1.65 trillion roubles for the first quarter of 2015, while analysts had forecast 1.644 trillion roubles.

 

Operating expenses for the quarter were up 24% to 1.45 trillion roubles.

The company said this rise was mainly caused by increased expenses for gas relating to an asset-swap agreement between Gazprom and Wintershall AG, a unit of German conglomerate BASF SE.

Gazprom's bottom line was also hit by a foreign-exchange loss of 25 billion roubles as the rouble weakened compared with a year earlier.

 

The overall volume of gas sold increased 9% to 144 billion cubic metres of gas.

The volume shipped to the key markets of Europe and Turkey rose by 49%, but the net value of those sales only rose 22%.

 

Staffing costs were higher due to growth in average salaries while oil and gas transit costs were higher as a result of increased charges associated with using the pipeline infrastructure of Ukraine.

Gazprom has plans to build new pipelines to Europe under the Baltic Sea to Germany and under the Black Sea to Turkey. But some European countries have opposed the plans.

Analysts and Western diplomats say Gazprom doesn't need to build the pipelines as it has plenty of export capacity via Ukraine, and that attempts to circumvent its neighbor have a political aim.

Gazprom has for years said that Ukraine is an unreliable transit country.

Source : Neftegaz.RU