GAZPROM took a huge blow to its profits in the first three months of 2014, as the conflict in Ukraine and a weaker rouble took their toll on the massive Russian gas supplier.
Net profits at Gazprom, Russia’s largest company, fell 41 per cent in the first half of 2014 compared with a year before, down to 223bn rubles (£3.6bn), as it also reduced its exports outlook for Europe this year.
Gazprom, under Russian state control since 2005, also revealed as relations with Ukraine worsened it had written off 71.3bn roubles of debt owed by Ukraine’s national oil and gas company, Naftogaz.
The write-off was “largely expected and already in the price”, said Igor Lebedinets from Moscow-based VTB Capital.
Gazprom, which owns 18 per cent of global natural gas reserves, was accused by Poland’s state gas firm PGNiG of limiting supply to Poland by 45 per cent recently. But Gazprom denied this yesterday, saying supply was unchanged.
Shares in Gazprom closed down 1.8 per cent in Moscow at 136.65 roubles.