Russia’s Gazprom posted its first annual loss in 20 years as sales to Europe slumped

Russia’s Gazprom posted its first annual loss in 20 years as sales to Europe slumped

Kremlin-owned gas giant Gazprom plunged to a net loss of 629 billion rubles ($6.9 billion) in 2023, its first annual loss in more than 20 years, as sales to Europe plummeted in the wake of Russia’s war in Ukraine.

The earnings, announced Thursday, highlight the dramatic decline of Gazprom, one of Russia’s most powerful companies.

Analysts expect net income of 447 billion rubles ($4.9 billion) in 2023, according to the Interfax news agency. The company made a net profit of 1.2 trillion ($13.1 billion) rubles in 2022, the year Russia launched a full-scale invasion of Ukraine.

According to a Reuters analysis, it was Gazprom’s first annual loss since the late 1990s or early 2000s, around the time Alexei Miller, an ally of President Vladimir Putin, took over the company in 2001.

The company, now headquartered in St. Petersburg, suffered heavy losses in the late 1990s after it accumulated foreign currency debt, soared in ruble value by the financial crisis of 1998. Russian gas exports to Europe, once its main export market, have declined largely because of the political fallout from the conflict in Ukraine. Gazprom, which enjoys a monopoly on piped gas abroad and has an oil unit, has also been the highest-profile target for lifting Western sanctions.

According to Reuters calculations, the company’s natural gas supply to Europe plunged 55.6% to 28.3 billion cubic meters last year.

Gazprom has not published its own export statistics since early 2023.

The company’s core profit, or earnings before interest, taxes, depreciation and amortization known as EBITDA, fell to 618.38 billion rubles ($6.7 billion) last year from 2.79 trillion rubles ($30.4 billion) in 2022, according to Reuters calculations.

EBITDA was the worst in 22 years, said Ronald Smith of Moscow-based broker BCS Global Markets.

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